December 5, 2014 / 3:40 AM / 6 years ago

CORRECTED-METALS-London nickel eyes 6 pct weekly gain as China ore prices rise

(Removes reference to month for nonfarm payrolls report)

* TISCO hikes NPI prices by 25 pct on month in December

* Trade seen quiet ahead of nonfarm payrolls

* Coming Up: Germany Industrial orders Oct 0700 GMT

By Melanie Burton

SYDNEY, Dec 5 (Reuters) - London nickel prices struck their highest in more than two months on Friday and were set to notch up a weekly gain of nearly 6 percent, as the price of ore in China rose on dwindling supply.

Stainless steel mills use nickel laterite ore to make nickel pig iron (NPI), a cheap alternative to refined nickel in their feed. But dwindling stockpiles of ore have raised prospects that the country’s stainless steel sector will have to turn to refined nickel instead.

“High grade nickel ore prices in China have been moving up slowly over the past two weeks... at some Chinese ports, traders are hoarding high grade ore,” said analyst Judy Zhu of Standard Chartered in Shanghai.

Also supporting prices, China’s biggest stainless steel mill TISCO hiked NPI prices by 25 percent this month from November, partly due to tight supply after Beijing sought to clear its skies ahead of an international conference in October, ordering plants to temporarily shut.

Three-month nickel on the London Metal Exchange had climbed to $17,200 a tonne by 0318 GMT, its highest since Sept. 26, targeting a weekly gain of 5.8 percent.

Other metals were subdued ahead of a key U.S. labour report.

The number of Americans filing new claims for unemployment benefits fell last week, pointing to an improving labour market.

Benchmark copper slipped by 0.3 percent $6,453.75 a tonne after gains of 1.3 percent in the previous session. Prices were set to end the week up nearly 2 percent, the biggest such gain since late August, rebounding from 4-1/2 year lows of $6,230.75 a tonne hit on Monday.

The most-traded February copper contract on the Shanghai Futures Exchange trimmed overnight gains to 45,990 yuan($7,475) a tonne, still up 1 percent.

Global miner Rio Tinto expects oversupply to pressure copper prices in the medium term and said its copper output would shrink in 2015, mainly due to work at its Kennecott Utah unit to avoid another landslide.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Three month LME tin ($1 = 6.1522 Chinese yuan) (Reporting by Melanie Burton; Editing by Joseph Radford and Richard Pullin)

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