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Nickel prices in China hit a record high on Thursday, bolstered by dwindling supplies while demand from stainless steel and electric vehicle battery sectors is expected to remain strong.
The most-traded February nickel contract on the Shanghai Futures Exchange surged 8% to a record high of 176,280 yuan ($27,787.32) a tonne by 0525 GMT.
Three-month nickel on the London Metal Exchange jumped 5.4% to $24,410 a tonne, having earlier hit a high since August 2011.
“Nickel market is seeing supply squeeze amid emerging supply concerns from Indonesia. The country looks serious about building processing and refining capacity, so export levy on nickel products could be a possibility this year,” said ANZ analyst Soni Kumari.
“Chinese nickel producers would have to bear higher input cost, while nickel pig iron producers would become cost competitive and see some restarts,” she added.
Inventories in Shanghai Futures Exchange warehouses were at 4,711 tonnes, near record lows seen in August 2021. Stocks in LME-registered warehouses have fallen to 94,830 tonnes, their lowest level in more than two years.
The premium for the cash over the three-month nickel contract was at $330 a tonne, hovering closer to a near 13-year peak of $495 seen earlier this week.
FUNDAMENTALS
* LME copper was up 0.4% at $9,875.5 a tonne, aluminium eased 0.2% to $3,044, lead was down 0.2% at $2,358 and zinc gained 0.7% to $3,605. Tin gained 1.2% to $43,405, having earlier risen to a record high of $44,180.
* ShFE copper rose 1.3% to 70,930 yuan a tonne, aluminium fell 0.6% to 21,340 yuan, zinc climbed 1.7% to 25,185 yuan and lead was 1% higher at 15,660 yuan. Tin climbed 6% to 337,780 yuan a tonne, having earlier hit a record high of 339,400 yuan.
* Sentiment in the industrial metals sector was also buoyed by top metals consumer, China’s, monetary easing efforts to prop up a slowing economy with markets expecting more stimulus.
* China’s refined copper production in 2021 rose 7.4% year-on-year to 10.49 million tonnes to an annual record high, National Bureau of Statistics data showed on Thursday.
* MMG’s Las Bambas copper mine on Wednesday inked a deal with local residents in Peru with increased job offers for locals in a bid to avoid future road blockades that could disrupt operations.