Stratton Metals seen behind nickel price rally-WSJ

NEW YORK, March 26 (Reuters) - Stratton Metals Ltd, a privately held global commodity trading company based in London, was seen as a main catalyst behind an unexpected rally in the price of nickel this year, the Wall Street Journal reported on Friday.

The company's order to pull about 4,000 tonnes of nickel, a metal used to make stainless steel, from London Metal Exchange warehouses at the beginning of the year helped spark a squeeze in the futures market that helped drive prices up 34 percent in a matter of weeks.

'We've taken 4,000 to 6,000 tonnes from the LME this year to supply our physical customers,' said Gordon Buchanan, a trader at Stratton Metals. 'It's not particularly unusual for us.'

Still, the order and subsequent price spike caught many market participants by surprise, with many interpreting the withdrawal as a sign of improved demand.

For a link to the company's website, click: http://www.stratmet.com/aboutstrattonmetals.php

As of Friday, nickel inventories in London stood at 155,922 tonnes, down from record highs of around 166,000 tonnes at the start of February.

For a graphic on LME nickel stocks and prices, click on: http://graphics.thomsonreuters.com/310/LME_NK7H0310.jpg

Analysts expect nickel's position as the top LME performer to continue this year as supply tightness and improved demand conditions to fuel prices.

(Reporting by Chris Kelly; Editing by Walter Bagley) Keywords: METALS NICKEL/STRATTON ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.