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Aluminium and other industrial metals prices climbed on Wednesday on hopes of more stimulus in China, while nickel resumed trading by sliding to its lower limit.
Three-month aluminium on the LME rose 2.1% to $3,345.50 a tonne by 1020 GMT, while benchmark copper added 1.4% to $10,044.
Nickel slid 5% to its lower limit after being suspended for a week, but electronic trading was halted due to technical issues.
“We’re seeing metals prices moving higher, which you can understand because tightness is still there,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“The market also liked the news from China that they want to keep markets stable and do what they can to mitigate any risks…(but) LME nickel is on its own, completely dislocated.”
Hansen said traders were likely seeking to arbitrage the big gap between LME and Shanghai prices. Wednesday’s lower limit for the LME was $45,674 while Shanghai nickel climbed 7.3% to 222,170 yuan or $35,001.
China, the world’s biggest consumer of base metals, will roll out policy steps favourable for its capital markets, Vice Premier Liu He said.
Also, data released on Tuesday showed China’s economy perked up in the first two months of 2022, although a surge in Omicron cases, property weakness and heightened global uncertainties weighed on the outlook.
The most-traded April aluminium contract on the Shanghai Futures Exchange ended daytime trading 1.1% higher at 21,960 yuan ($3,459.63) a tonne.
China’s Tsingshan Holding Group has reached agreements with two companies to swap its nickel products with a purer form of the metal to close out large short positions it holds on the LME, state-backed Shanghai Securities News said.
* Indonesian state miner PT Aneka Tambang’s nickel ore production and sales doubled in 2021 from a year earlier, the company said on Wednesday.
* In other metals, LME zinc rose 0.4% to $3,813.50, lead added 0.5% to $2,254, but tin slipped 0.8% to $42,750.