6% of global nickel output at risk as turmoil hits New Caledonia

There is certainly some drama in the base metals market at the moment. Copper hit records on a supply squeeze and now nickel prices are surging, in part due to violent protests in New Caledonia.

The French Pacific territory saw a wave of riots after a roposed amendment to the French Constitution that would change local voting rules in the territory.

A state of emergency was declared for 12 days after 4 people died in the riots on the island of 270,000.

The territory has held three independence referendums — all defeated — but it remains a thorny subject that was inflamed after a proposed constitutional change to expand French citizens’ eligibility to vote in provincial elections.

In the bigger picture, the island is a critical global producer of nickel and European officials fear it could quickly be co-opted by China if independent.

Prices of nickel have been improving from the February trough and rose 5% today to a year-to-date high.

This article was written by Adam Button at www.forexlive.com.