London Metal Exchange prices were buoyant Tuesday, responding to supply concerns, falling stocks and rising oil prices boosting sentiment across commodity markets, traders and analysts said.

Strongest performer was LME three-month nickel, breaching the $25,000 a-metric-ton level for the first time and setting an all-time high of $25,700/ton, up 4.2% on the Monday PM kerb.

LME nickel stocks have been steadily declining since the start of the year from over 30,000 tons to 8,418 tons, down 486 tons on the day. Cancelled warrants, denoting material due to leave the warehouse soon, have risen to 50.23%, up from 46.23%, leaving nickel stocks close to critical levels.

The cash-to-three-month spread flared out to $2,450, curtailing short selling, a trader said.

While prices are seen as overblown and fueling substitution of other materials for nickel, its rally could extend further before consolidating, the trader said.

LME copper rose to a five-week high of $7,977.50/ton. Speculative buying following a small stock rise pushed prices up, said analyst Roy Carson at Triland.

A rise in oil prices in the afternoon following comments by Iran's chief negotiator predicting a long process on talks regarding the country's nuclear program boosted prices across commodity markets.

Copper will remain extremely sensitive to supply disruptions due to slow capacity growth, Goldman Sachs said in a report.

At the same time, the possible closure of Grupo Mexico SA's La Caridad mine, Escondida contract negotiations, and Codelco contract negotiations later in the year added to copper's bullish outlook, a trader said.

LME zinc was in bullish mood, charging to a one-month high of $3,570/ton, up $70 before trade selling pared gains.