2014.10.2904:12:19UTC+00Nickel on track to post largest two day jump since May behind concerns over supply

Nickel climbed up for the second straight day to be on track to record its largest two day improvement in five months behind outlook that lower prices will lead to an increase in purchases and a reduction in lower grade varieties.

Futures for the commodity metal with a delivery date in three months advanced by as much as 2.3% today after climbing by 5.1% yesterday. It was trading 0.8% up at a price per metric ton of $15,662 late morning Tokyo time to pull up its gains to the best since May 19th on the London Metal Exchange. Prices fell as low as $14,690 yesterday, the lowest since March, following a collapse into a bear market in September. Nickel is up 13% so far this year due to Indonesia’s supply ban in January that sparked concerns over supply.

South Korea purchased 100 metric tons of nickel yesterday in a tender, while analysts from Goldman Sachs Group Inc. say that the metal may rise with output of nickel pig iron likely to be at current prices.

Metals trader Chae Un Soo from Seoul’s Korea Exchange Bank Futures Co. says that, “We’ve seen good physical buying interest after recent price drops. Investors are now refocusing on fundamentals including Indonesia’s ore export ban.”

Copper on the London market dropped by 0.5% for a price per ton of $6,763 for its first decline in three days. In New York, futures for copper with a delivery date in December declined by 0.4% to a price per pound of $3.0795, while the metal for January in Shanghai was mostly unchanged at 47,490 yuan, or $7,772, per ton.