Updated: New York, Sep 14 23:05London, Sep 15 04:05Tokyo, Sep 15 12:05

Nickel Rises on Renewed Buying From Steelmakers; Copper Gains

By Chanyaporn Chanjaroen

Sept. 14 (Bloomberg) -- Nickel rose for a fourth straight day in London on demand from stainless-steel makers, which consume two-thirds of the metal. Copper and lead gained, reversing earlier declines.

Steel mills have resumed buying after delaying purchases as nickel prices traded near a record. Nickel has fallen 45 percent since reaching an all-time high of $51,800 a metric ton on May 9. Stockpiles have increased more than fivefold since then.

``The bulk of the fall is over,'' David Thurtell, an analyst at BNP Paribas SA in London, said today by phone. ``Consumers who were withholding purchases earlier are now stepping in.''

Nickel for delivery in three months on the London Metal Exchange rose $750, or 2.7 percent, to $28,650 a ton as of 4:22 p.m. local time. It has climbed 6.1 percent this week. Stockpiles monitored by the LME rose 2.8 percent to 29,190 tons, the exchange said today in a daily report.

Nickel-ore shipments from the Philippines, the largest supplier of the raw material to China, fell for the first time this year as the country restricted investment in furnaces that process the raw material.

Exports to China from the southern Philippines, which made up more than 90 percent of the Southeast Asian nation's nickel- ore shipments last year, more than halved to 262,422 tons in August from 642,399 tons a year ago, Bureau of Customs data show.

China, the world's largest consumer of LME-traded metals, raised its benchmark one-year lending rate to a nine-year high of 7.29 percent, the central bank said today on its Web site. The bank is trying to cool booming investment, and inflation that's accelerated to the fastest pace since 1996.

Copper Stockpiles

The efforts by China are unlikely to curb metals demand, said Andrew Keen, an analyst at Sanford C. Bernstein in London. ``There's no sign'' of a slowdown, he said.

Copper gained as much as $84, or 1.1 percent, to $7,622 a ton, the highest intraday price since Aug. 9.

LME copper inventories declined 1 percent to 135,750 tons, the lowest since Aug. 28. China, the largest copper consumer, produced 311,600 tons of the metal in August, 26 percent more than a year before. Production increased 16 percent in the first eight months of 2007, government data released today showed.

Zinc dropped $10 to $2,860 a ton. Zinc stockpiles earmarked for withdrawal from LME-registered warehouses jumped to the highest in almost five months. So-called canceled warrants rose 25 percent to 12,275 tons, the highest since April 18. They account for 17 percent of total inventories of 72,750 tons.

Zinc for immediate delivery traded $24 a ton above the benchmark three-month price, suggesting lower availability of LME metal stockpiles. The premium, known as backwardation, is the largest since Aug. 13.

Aluminum lost $23.75 to $2,456.25 a ton and lead added $60 to $3,230. Tin dropped $100 to $14,900.

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net

Last Updated: September 14, 2007 12:04 EDT