Feb. 7 -- Nickel is moving more deeply into contango as a decline in Russian exports suggests metal has been retained as inventory, adding to a global glut, said JPMorgan Chase & Co.

Contango describes a market in which later-dated contracts trade at higher prices than those with nearer dates. Immediate- delivery nickel today reached a discount of $91 a metric ton to the three-month contract, heading for the widest closing gap since December 2009, on the London Metal Exchange.

Russian nickel exports dropped 19 percent to 195,500 tons last year even after December’s 91 percent jump, customs figures showed today. OAO GMK Norilsk Nickel (GMKN), the world’s biggest producer of the metal, said Jan. 30 output of nickel at its Russian units climbed 0.7 percent to 237,200 tons last year.

“The weaker export number reflects a buildup in domestic inventory of refined metal that will continue to dribble out,” Michael J. Jansen, a London-based JPMorgan analyst, said in a report today. “There is a lot of nickel in the global economy which is yet to be priced into flat price and spreads. However, the market is suspicious of the pending impact, evident in the steadily widening contango.”

Nickel for three-month delivery rose 1.4 percent to $21,600 a ton by 5:15 p.m. on the LME. The metal, used mostly to protect stainless steel from corrosion, is up 15 percent this year after dropping 24 percent in 2011.

The nickel market will be in surplus this year by 54,000 tons, JPMorgan forecasts. Inventories monitored by the LME climbed 9 percent to 94,518 tons since Nov. 1, data from the exchange show. Norilsk expects total output of the metal to gain as much as 3.4 percent to 305,000 tons in 2012 after a 0.8 percent drop last year.