The world's largest nickel and palladium producer, Norilsk Nickel, has revealed that its 2003 profit margin has missed analyst forecasts.

According to Bloomberg, Norilsk attributed the lower than expected profits to trading losses in London and a drop in palladium prices.

Losses from trading metal through the London Metal Exchange could reduce profits by as much as $50 million, the firm explained.

Norilsk also warned that the reduced profits could lead to the 'possible write-down of the book value of certain mining assets' in the US.

Shares in Norilsk fell by four per cent, after more than doubling in the past year on the back of rising Nickel prices.

However, this has been offset by a three-year low in palladium prices, which has raised the prospect of a write-down in the firm's investment in Stillwater Mining Co - America's third-largest US metals miner.

However, Norilsk stated: 'Such a loss, if any, will have no impact on the company's cash flow statement.'