LONDON- Nickel prices jumped to the strongest in nine months on Friday on unrest in nickel producer New Caledonia, while copper surged to a 26-month peak after China announced fresh support for its ailing property sector.
Three-month nickel on London Metal Exchange (LME) surged 5.2 percent to $20,820 a metric ton after touching $21,365, the highest since August 2023.
Analyst Dan Smith said the rallies in nickel and copper may push higher in the short term as speculators keep buying, but supply-demand outlooks would eventually spur corrections, especially in nickel.
“We’ve seen some weird rallies in the sense that investors don’t seem to care much about fundamentals,” he said.
“We’re a bit cynical about how far the nickel rally can run. You look at the base metals and the one with the worst fundamentals is nickel.”
Rioting in French-ruled New Caledonia spurred a massive operation to regain control of the capital Noumea in a country that accounted for 6 percent of global mine nickel output last year.
“Supply from New Caledonia is significant enough to move the needle, but it’s nothing compared to Indonesia. Supply growth from Indonesia is pretty amazing and is just going to swamp the market in six to 12 months.”
LME copper climbed 2.3 percent to $10,662 per ton, the strongest since March 2022.
