The Russian metals giant Norilsk Nickel has announced a massive 82 per cent year-on-year increase in first quarter profits.

A spokesman for world's largest nickel and palladium producer told Bloomberg that net income jumped to 17.3 billion rubles ($600 million) during the first three months of 2004, up from 9.5 billion rubles in the same period last year.

Scott Semet, an analyst at MDM Bank, explained that the profits came on the back of multi-year highs in metal prices, adding: "In subsequent quarters their earnings should be a little bit lower."

Platinum surged to a 24-year high, while nickel reached a 14-year peak and palladium a 19-month high in the first quarter of 2004 as the rapidly expanding Chinese economy increased demand and pushed up prices.

However, market prices have started to reduce as buyers turn to cheaper substitutes and speculation grows that Chinese demand may slow.

Car manufacturers have also driven demand for platinum and palladium for use in catalytic converters to clean exhaust emissions.