Nickel hit its highest in nearly 14 months on Monday on Indonesia's ore export ban, now in its third month, and on the prospect of tougher sanctions on Russia over its actions towards Ukraine. The Indonesian government banned exports of nickel ore in mid-January to force the creation of value-added mineral processing in the country.
-- Copper steadies, markets wait for China GDP data
This has driven the price of three-month nickel on the London Metal Exchange up 28 percent so far this year. On Monday, it an hit an intraday high of $17,917 a tonne - its strongest since February 19 last year - before retreating to close at $17,790, up 2.24 percent.
Total nickel ore exports last year were around 64.8 million tonnes, and will fall 94 percent to 3.5 million tonnes this year, Indonesia's mines ministry has said. "The Indonesia story has not changed ... there is no sign yet that there might be any reversal of the policy," Natixis analyst Nic Brown said. "And I think when you hear the Americans starting to talk about potential sanctions on Russia, people instinctively look at palladium and nickel: two metals that could be affected either by sanctions or by Russian retaliation."
Russia's Norilsk Nickel, the world's biggest producer of nickel and palladium, produced more than 230,000 tonnes of refined nickel last year, a big chunk of the roughly 1.9 million tonne market. The European Union threatened Russia on Monday with more sanctions over its actions in eastern Ukraine, which Britain said was being destabilised by Moscow, although some EU states said diplomacy should be given more time.
Among other metals, three-month copper on the LME edged down 0.05 percent to end at $6,667 a tonne. It has recovered since hitting a 3-1/2 year low of $6,321 a tonne in March, when worries about growth and tighter credit in China spurred selling. Tin finished up 0.32 percent at $23,450 a tonne after data showed refined tin shipments from top exporter Indonesia fell to 5,847 tonnes in March, down 27 percent from the same month last year.
"As the largest global exporter of tin, Indonesia would in fact have to export around 8,000 tons of tin each month to maintain a balance between supply and demand in the world market," Commerzbank said in a note. "The global tin market therefore remains fairly strained, supporting continuing high prices." Zinc added 1.4 percent to end at $2,054 a tonne and lead gained 0.95 percent to close at $2,120. Aluminium failed to trade in closing rings and was last bid down 0.1 percent at $1,882 a tonne.