At $9,575 a ton on the London Metal Exchange the metal was up more than 25 percent in a week and a blistering seven percent in just a few hours of Monday trading.
Nickel -- at its highest price since September 1990 -- was already in hot demand as a key component of stainless steel in a rebounding global economy. This was before the latest reports of trouble at Siberia's Norilsk mining and smelter complex.
"We are hearing that power was cut off to the pumps. The mine flooded and the pumps have now frozen," leading metals analyst Jim Lennon of Macquarie Equities Ltd said.
Norilsk Nickel officials have said that a power failure last month would slow production this year, but that the decline is unlikely to affect exports. The failure, which occurred Nov. 4, led to a restriction of heating that damaged equipment at the metallurgical plant.
But London brokerage Billiton Metals sees "real concerns that although exports from Norilsk may not be affected in the near term there could be substantial interruptions next year."
Trade speculation on how hard Norilsk production may be hit ranged from 30 to 50 percent. Norilsk's 1994 output was previously forecast at around 140,000 tons, of which some 100,000 should have been exported to the West.
If losses are as bad as feared it is conceivable Norilsk may lose around 40,000 to 50,000 tons, Lennon said.
But there is enough capacity in the West in 1995 to cope with a shortfall of this size. Extra available output in Canada, Japan and Australia comes to some 75,000 tons, he said.
Nickel dragged up London prices on other industrial metals. Copper hit a new four-year high of $2,955 per ton but then eased. Aluminum also rose to $1,950 per ton. But in most commodity markets a 1994 boom seems to have stalle. Gold was fixed in London on Monday at $377.30 per ounce, its lowest in 16 weeks.
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