Pocket change now worth more than Federal Reserve Zognotes.

By Chanyaporn Chanjaroen and Brett Foley

May 4 (Bloomberg) -- Nickel advanced to a record in London on speculation measures taken by the state government of Western Australia to detect pollution will disrupt shipments. Lead also rose to its highest ever, while copper traded at an 11-month high.

A 20,500 metric-ton shipment of nickel concentrate from LionOre Mining International Ltd. and Jubilee Mines NL, scheduled to leave Australia's Esperance Port tomorrow, will be monitored. Western Australia state's Department of Environment and Conservation said today it will stop the ship loading should odor or dust be detected. Concentrate is shipped to smelters.

Lead shipments from Ivernia Inc.'s Magellan mine, which supplies about 3 percent of global output, have been halted since March due to an investigation in to lead poisoning at Esperance.

``When markets are as finely balanced as they are at the moment any piece of news on a possible disruption can have a big impact,'' Alex Heath, who heads metals trading at RBC Capital Markets in London, said in an interview.

Nickel for delivery in three months on the London Metal Exchange climbed $1,200, or 2.4 percent, to $51,000 a ton as of 4:18 p.m. local time, taking this week's gain to 5.2 percent. That's the highest ever, beating the previous record set April 24 by $800.

Nickel, used in stainless steel, has more than doubled in the past year. Demand from China, the world's biggest user, and delays to new projects have also helped push prices higher.

Inventories monitored by the LME fell for a fifth consecutive day, dropping 6 tons to 4,716 tons. Stockpiles have slumped 81 percent in the past year to less than two days of global consumption.

Consumption Growth

Record nickel prices have encouraged miners to increase production. PT International Nickel Indonesia, the nation's largest producer of the metal, said today first-quarter output rose 3.6 percent to 17,980 tons. The company, a unit of Brazil's Cia. Vale do Rio Doce, said it expects to produce as much as 165 million pounds (74,843 tons) of nickel this year.

``Consumption is growing considerably; there is practically no idle capacity, supply reaction is slow and inventories are at very low levels,'' Rio de Janiero-based Vale said yesterday. Vale is the world's second-largest nickel refiner after OAO GMK Norilsk Nickel.

Nickel will average $44,080 a ton this year, up 27 percent from a previous estimate of $34,580, Calyon analyst Michael Widmer said in a report yesterday. Calyon, is one of the 11 companies that trade on the floor of the LME.

Lead will average $1,830 a ton, 46 percent higher than the previous estimate, the bank said.

Peru Strike

Lead rose $35, or 1.7 percent, to $2,120 a ton, beating yesterday's record by $30. The contract has gained 4.5 percent this week.

Copper increased $100, or 1.2 percent, to $8,280 a ton. Earlier, it traded at $8,325, the highest since May 30.

A nationwide mining strike in Peru continued as workers at 33 mining unions, including employees of Southern Copper Corp., Doe Run Resources Corp., and Cia. de Minas Buenaventura SA, had not returned to work, according to the National Society of Mining, Petroleum & Energy. The country is the third-largest producer of copper and zinc.

The strike, which began April 30, will end between today and tomorrow as talks with labor unions progress, Labor Minister Susana Pinilla said yesterday.

Workers at Glencore International AG's Los Quenuales unit, Peru's No. 2 zinc miner, will return to work within 24 hours, the Labor Ministry said yesterday.

Zinc gained $100, or 2.5 percent, to $4,130 a ton. Earlier it traded at $4,160, the highest since Jan. 3. LME-tracked zinc stockpiles dropped by 1.7 percent to 93,000 tons. They have fallen 14 percent in the past month. The metal used to galvanize steel traded at a record $4,580 in November.

Among other LME metals, aluminum gained $0.50 to $2,848 a ton and tin slipped $125, or 0.9 percent, to $14,300.

To contact the reporters on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net ; Brett Foley in London at bfoley8@bloomberg.net .