Nickel Rises Most in Two Weeks on Canadian Supply Concerns <http://www.bloomberg.com/apps/news?pid=20601012&sid=arC80UGheBrg&refer=commodities>
By Millie Munshi Jan. 31 (Bloomberg) -- Nickel prices in London rose the most in two weeks on concern Canadian mines owned Xstrata Plc, the world's fourth-largest producer, might be shut by a strike tonight, cutting supplies. The price of nickel, used to make stainless steel, rose to a record for eight consecutive sessions this month on concern labor unrest would curb output. Xstrata faces a midnight deadline to reach an agreement with a union representing more than 1,000 workers at its Sudbury unit in Ontario. ``Nickel is just in an extremely tight supply-and-demand balance,'' said Mark Liinamaa, a metals analyst at Morgan Stanley in New York. The securities firm boosted its 2007 forecast for nickel by 35 percent yesterday. Nickel for delivery in three months gained $1,300, or 3.6 percent, to $37,000 a metric ton on the London Metal Exchange. The percentage gain was the most since Jan. 27. Prices reached a record $38,950 a ton on Jan. 26 and have more than doubled in the past year. Xstrata hasn't returned to the bargaining table today, said Richard Paquin, lead negotiator for the Canadian Auto Workers union. He said he thought an agreement might still be reached by the deadline. ``If the strike settled, I wouldn't be surprised to see prices somewhat correct in the short term,'' Liinamaa said. A labor accord or a brief strike might send nickel prices down more than 20 percent, Merrill Lynch & Co. said today in a report. Russia's OAO GMK Norilsk Nickel is the world's biggest nickel producer, followed Brazil's Cia. Vale do Rio Doce and BHP Billiton Ltd. To contact the reporter on the story: Millie Munshi in New York at [EMAIL PROTECTED] *Last Updated: January 31, 2007 14:05 EST*
