Industrial metal lead extended its recent hot streak on Monday, hitting another high, while steel additive nickel was hit by reports of lower use, fund managers and analysts said.

Lead prices on the London Metal Exchange (LME) have almost doubled this year, while nickel has moved the other way.

Benchmark copper was subdued with the market focused on possible mine strikes, though stocks in LME warehouses rose.

Lead is the big mover upwards and nickel is the big mover downwards. The two movers have their structural problems, while the others have been flat, and look a bit vulnerable, a Geneva-based fund manager said.

Lead, used mainly in batteries, extended its recent rise to hit a high of $3,125 per tonne before closing at $3,090, up $60 or 2.0 percent from Friday's close.

The metal is now more than 85 percent higher than at the start of the year, supported by strong demand from Chinese industry and tight supply, particularly in the light of restricted exports from Australia.

With lead, the problems are pretty genuine. They don't need much fuel to be added to the fire, the fund manager said.

The Magellan mine, which accounts for 3 percent of the world's mined lead, was shut in April on environmental grounds and shipments may not restart until later this year.

Nickel, which is added to stainless steel as a hardening alloy, was down $425 at $32,100.

The metal blazed to $51,800 in May this year -- more than double its price in May 2006 -- but has since fallen around 40 percent on concerns that such high prices were discouraging use.

There are signs that the use of nickel pig iron is exerting a significant impact; that substitution is becoming more widespread; and that the stainless steel market is itself is beginning to cool from the torrid pace of recent quarters, Sean Corrigan, Chief Investment Strategist at Diapason Commodities Management, said.

The world's fourth largest steel maker, South Korea's POSCO, said it would cut stainless steel output in July and August by a total of 50,000 tonnes in response to slower demand.

POSCO produces some 2 million tonnes of stainless per year.


The price of copper, often considered a benchmark of the metals market in particular and economic growth in general, has recently been supported by actual and threatened mine strikes.

Strikes at the Collahuasi and Andina mines in Chile ended late last week and copper was down $105 at $7,795. It is around 25 percent higher than at the start of the year, but almost $1,000 below its peak last May.

In New York, copper for September delivery settled down 3.10 cents at $3.5620 a lb at the New York Mercantile Exchange's COMEX division, after dealing in a session range of $3.5515 to $3.6130.

Copper prices are moderate following the resolution of some of the strikes looming over the market and a net rise in LME stocks, Barclays Capital said in a market report.

Stocks of unused metal rose 1,325 tonnes to 98,875, but are still more than 48 percent lower than at the end of 2006.

In Canada, the strike at Xstrata's Canadian Copper Refinery continued, and in Peru, the dispute at Southern Copper Corp. was still not resolved, but unions extended a strike truce in order to continue talks.

Mexico's mine union said it postponed the deadline until July 30 for a threatened strike at three Grupo Mexico mines.

On the stock market, Lonmin shares weighed on the mining sector, falling 6.85 percent after the world's third biggest platinum producer cut its full-year sales forecast.

The FTSE share index was down 0.28 percent.

Aluminum (MAL3: Quote, Profile, Research) gained $5 at $2,795, zinc (MZN3: Quote, Profile, Research) was down $80 at $3,510 and tin (MSN3: Quote, Profile, Research) shed $50 to $14,150/14,155.

Metal Prices at 1609 GMT:

Metal Last Change Pct Move End 2006 Ytd Pct


LME Cu 7800.00 -100.00 -1.27 6330.00 23.22

SHFE Cu* 65300.00 620.00 +0.96 60080.00 8.69

LME Alum 2790.00 0.00 +0.00 2805.00 -0.53

SHFE Alu* 19490.00 -10.00 -0.05 20550.00 -5.16

COMEX Cu** 359.20 -2.35 -0.65 287.10 25.11

LME Zinc 3515.00 -75.00 -2.09 4230.00 -16.90

SHFE Zinc* 27110.00 -95.00 -0.35 28915.00 -6.24

LME Nick 32100.00 -1100.00 -3.31 33325.00 -3.68

LME Lead 3085.00 55.00 +1.82 1670.00 84.73

LME Tin 14150.00 -50.00 -0.35 11510.00 22.94 ** 1st contract month for COMEX copper * 3rd contact month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07