Security concerns recede, nickel hits new high

LONDON, August 11 (Reuters) Base metal futures bounced on Friday as worries about the damage to economic growth from terror attacks receded and focus returned to supply shortages, while nickel hit a new record high of ,100.

Prices slipped on Thursday after British police said they had uncovered a plot to bomb transatlantic aircraft.

''I think the security alert yesterday didn't have much of an impact, look at where the prices are now, they are hardly affected at all,'' a trader said, adding that low inventories would support nickel prices.

At 1020 GMT nickel

Stocks of nickel in LME registered warehouses fell 564 tonnes to 5,814, but of that only 2,406 tonnes -- less than one day's worth of global consumption -- is freely available.

Also boosting nickel prices is unusually strong demand for stainless steel. Traditionally August is quiet for stainless steel makers, but this year many still have full order books.

''Demand ... is still very strong and inventories are low,'' said Neil Buxton, metals analyst at GFMS Metals Consulting.

''The stainless market has been exceptionally strong despite high nickel prices ... demand for stainless steel hasn't been affected ... You also have a strike in the background.'' Supporting nickel prices has been a decision by Inco to shut down production facilities at its 54,000 tonne-per-year Voisey's Bay nickel mine in Canada after workers went on strike.

SLIGHTLY DIFFERENT Copper was indicated up 1.1 percent or at ,960/7,980 after trading at a 4-week high of ,150 on Thursday.

A crippling strike at Chile's Escondida, the world's largest coopper mine, by more than 2,000 workers has spooked the market.

On Thursday workers for the second time in four days cancelled plans to resume wage and bonus negotiations.

Escondida was expected to produce around 3,500 tonnes a day this year. It normally accounts for about 8 percent of global copper production and 20 percent of Chilean copper output.

The strike which started on Monday has cut production by around 60 percent and majority owner BHP Billiton has declared force majeure on delivery of copper concentrates.

Force majeure frees companies from their obligations without penalties if events are beyond their control. They are normally used in the case of natural diasters.

''Most strikes in Chile tend to be fairly short-lived but this one could shape up to be slightly different,'' Buxton said.

''(The workforce's) bargaining position is strong given wider tightness ... (But) if there is an early resolution to the dispute ... copper prices could come off.'' Copper stocks rose 6,500 tonnes to 111,250, but that is little more than two days of global consumption.

Elsewhere aluminium was up at LONDON, August 11 (Reuters) Base metal futures bounced on Friday as worries about the damage to economic growth from terror attacks receded and focus returned to supply shortages, while nickel hit a new record high of $27,100.

Prices slipped on Thursday after British police said they had uncovered a plot to bomb transatlantic aircraft.

''I think the security alert yesterday didn't have much of an impact, look at where the prices are now, they are hardly affected at all,'' a trader said, adding that low inventories would support nickel prices.

At 1020 GMT nickel

Stocks of nickel in LME registered warehouses fell 564 tonnes to 5,814, but of that only 2,406 tonnes -- less than one day's worth of global consumption -- is freely available.

Also boosting nickel prices is unusually strong demand for stainless steel. Traditionally August is quiet for stainless steel makers, but this year many still have full order books.

''Demand ... is still very strong and inventories are low,'' said Neil Buxton, metals analyst at GFMS Metals Consulting.

''The stainless market has been exceptionally strong despite high nickel prices ... demand for stainless steel hasn't been affected ... You also have a strike in the background.'' Supporting nickel prices has been a decision by Inco to shut down production facilities at its 54,000 tonne-per-year Voisey's Bay nickel mine in Canada after workers went on strike.

SLIGHTLY DIFFERENT Copper was indicated up 1.1 percent or $85 at $7,960/7,980 after trading at a 4-week high of $8,150 on Thursday.

A crippling strike at Chile's Escondida, the world's largest coopper mine, by more than 2,000 workers has spooked the market.

On Thursday workers for the second time in four days cancelled plans to resume wage and bonus negotiations.

Escondida was expected to produce around 3,500 tonnes a day this year. It normally accounts for about 8 percent of global copper production and 20 percent of Chilean copper output.

The strike which started on Monday has cut production by around 60 percent and majority owner BHP Billiton has declared force majeure on delivery of copper concentrates.

Force majeure frees companies from their obligations without penalties if events are beyond their control. They are normally used in the case of natural diasters.

''Most strikes in Chile tend to be fairly short-lived but this one could shape up to be slightly different,'' Buxton said.

''(The workforce's) bargaining position is strong given wider tightness ... (But) if there is an early resolution to the dispute ... copper prices could come off.'' Copper stocks rose 6,500 tonnes to 111,250, but that is little more than two days of global consumption.

Elsewhere aluminium was up $30 at $2,575/2,580, zinc added $80 at $3,465/3,485, lead was a touch firmer at $1,195/1,205 and tin $25 gained at $8,425/8,525.

REUTERS SBA PM1637 ,575/2,580, zinc added at