Nickel prices hit a nearly five-month high on Friday, tracking strong gains in stainless steel, buoyed by strong demand for the metal with supplies running low.
Three-month nickel on the London Metal Exchange CMNI3 rose as much as 2.3% to hit its highest since Feb. 25 of $19,205 a tonne.
The most-traded August nickel contract on the Shanghai Futures Exchange SNIcv1 climbed as much as 3.6% to 143,710 yuan ($22,224.46) a tonne, its highest since Feb. 26.
While nickel demand for electric vehicle batteries is forecast to climb in the coming years, stainless steel still accounts for the bulk of the metal’s consumption.
“Stainless steel price is supper strong. (Nickel) demand is good and supply is tight,” a China-based nickel trader said.
Chinese stainless steel futures SHSScv1 surged more than 6% to a record high on strong consumption and raw material supply crunch, while concerns over output cut in the steel sector also supported prices.
ShFE nickel inventories NI-STX-SGH were last at 7,555 tonnes, down 58% year-to-date and tumbling 74% from the same time last year.
China’s nickel cathode output fell 4.4% year-on-year to 79,400 tonnes in January-June, state-backed research house Antaike said, adding, output in the second half was expected to reach 88,000 tonnes.
FUNDAMENTALS
* LME copper CMCU3 dipped 0.3% to $9,461.50 a tonne, aluminium CMAL3 edged up 0.3% to $2,526 a tonne, and tin CMSN3 jumped as much as 1.4% to $33,590 a tonne, its highest since April 2011.
* ShFE copper SCFcv1 advanced 0.8% to 69,130 yuan a tonne, tin SSNcv1 climbed as much as 7.7% to a record high of 238,580 yuan a tonne, and zinc SZNcv1 increased 2.1% to 22,395 yuan a tonne.
* Spot treatment charges for copper concentrate in China AM-CN-CUCONC, as assessed by Asian Metal, were last at $50.50 a tonne on July 15, highest since Jan. 8 and indicating that supply tightness of the material has eased.
Source: Reuters (Reporting by Mai Nguyen in Hanoi, additional reporting by Tom Daly; Editing by Subhranshu Sahu and Rashmi Aich)