Bareksa.com - Nickel retreated from 15-month highs on Monday as investors turned cautious about the metal making further gains and worries abated about the severity of U.S. economic sanctions against Russia, a major producer of the metal.

Nickel has gained some 35 percent this year following an Indonesia ban in January on unprocessed ore exports. The price has also been boosted by fears of outright war in Ukraine and worries that the West will impose harsher sanctions on Russia.

On Monday, the United States froze assets and imposed visa bans on seven powerful Russians close to President Vladimir Putin, and also sanctioned 17 Russian companies in reprisal for Moscow's actions in Ukraine.

But U.S. lawmakers said the measures were too mild to deter Moscow from further action in Ukraine.

London Metal Exchange (LME) nickel rose as high as $18,715 a tonne, its highest since Feb. 6, 2013, before closing at $18,175 from $18,450 at the close on Friday.

INTL FCstone analyst Edward Meir said the reversal was likely mostly due to a round of profit taking after the metal's steep rise.

"The sanctions are a bit mild and I think that is part of the reason as well," Meir added. "This is a minute by minute market now."

Heavily armed pro-Russian separatists, who Kiev and the West believe are backed by the Kremlin, have proclaimed an independent "people's republic" in the eastern Ukrainian city of Donetsk, while holding several European monitors hostage.

"Russia and Ukraine are creating noise ... (nickel) is pricing in lots of disruptions this year," Commerzbank analyst Eugen Weinberg said.

In other metals, three-month copper on the LME climbed to $6,798 a tonne, its highest since March 7, before dipping to $6,745 a tonne at the close.

Prices have risen by 2 percent this month but are still down by around 8 percent this year.

Traders estimated that bonded stocks in Shanghai were sitting at around 800,000 tonnes to 850,000 tonnes but said these supplies were not easily available to local manufacturers because of curbs on credit.

"People thought the crackdown on LCs (letters of credit) would be bearish for copper because it would result in less imports. Actually it has turned out to be bullish," one Chinese trader said.

While supplies were constrained, China's demand for copper rose for seasonal reasons and due to purchases by China's State Reserves Bureau (SRB), which sources said had bought at least 200,000 tonnes of bonded copper after global prices hit multi-year lows in March.

The premium for domestic copper prices surged above 1,000 yuan ($160) last week, the highest in almost a year, before easing to around 530 yuan on Monday, up from a discount at the start of March.

China aims to start building more than 7 million units of public housing this year, the Ministry of Housing and Urban-Rural Development said on Saturday, signalling the latest government move to counter high property prices.

Aluminium closed at $1,829 a tonne from $1,853 at the close on Friday, while tin closed at $23,600 from $23,625 and zinc at $2,066 from $2,057. Lead closed at $2,136.50 a tonne from a last bid of $2,162 on Friday. (Source : Reuters)