LME nickel for three-month delivery was at 38,150 usd a tonne, after earlier hitting a record high of 38,500 usd. Tin was at 12,400 usd a tonne, off an all time high of 12,500 usd, which it hit earlier today.

Both metals hit record highs yesterday, although nickel has been soaring to new records for the past six trading sessions, supported by possible strike action at Xstrata’s Sudbury mine in Ontario.

“I don’t think anybody will go short at the moment. Sudbury is one of the biggest nickel producers in the world, it produces roughly 4 pct of nickel supply,” Calyon analyst Michael Widmer said.

The nickel market can ill afford another supply disruption as available LME stockpiles, which stand at just under 4,000 tonnes, currently account for just under a day’s worth of global consumption.

Yesterday, prices for cash nickel broke through the critical 40,000 usd a tonne level, putting premiums for the cash metal over the three month price at 3,200 usd by the close of trade.

Standard Bank analyst Michael Skinner said the 40,000 usd a tonne level for three-month nickel is now in sight, noting prices have gained about 25 pct since the start of the year.

Since the start of last year, nickel prices have gained around 180 pct.

Elsewhere, tin was soaring on continued concerns over the security of supply from Indonesia, where the government has issued regulations limiting refined tin exports.

Yesterday, news reports said police in the Bangka-Belitung province were investigating tin miner PT Koba Tin on counts of sourcing illegal tin ore and operating outside its mining area. Analysts said tin prices will continue to be underpinned so long as there remains uncertainty over the operation of small smelters in Indonesia, the world’s third largest tin producer.

Last October, dozens of small smelters ceased operating after the Indonesian police closed down three for operating without a permit. In other metals, aluminium was up at 2,838 usd a tonne, against 2,815 usd a tonne, holding above the key 2,800 usd level amid supply concerns in South Africa and a strike in Guinea that is affecting bauxite exports. Bauxite is used to produce alumina and Widmer said while there is no shortage of alumina on the market, the strike in Guinea is nevertheless helping underpin prices. In addition, prices continue to be underpinned because one player has established a dominant market position that could potentially see the withdrawal of nearly all the LME’s aluminium inventory.

Furthermore, there is speculation the holder of the dominant position is also in possession of a large number of call options, which would give them the right to buy further futures contracts at a set price.

“The tightness… looks as though it will last at least till March and it would be easy to see the aluminium market make further ascents in short term with 3,000 usd the current target,” Skinner said. He added that overall sentiment in the metals has taken a turn for the better amid more positive economic data, supply concerns, dominant positions and acute tightness.

Copper was up at 5,730 usd a tonne against 5,660 usd at the close yesterday, lead was up at 1,690 usd a tonne against 1,673 usd, while zinc rose to 3,750 usd a tonne against 3,700 usd.

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