By Mai Nguyen
Oct 21 (Reuters) – Nickel prices in Shanghai hit a record high on Thursday as falling Chinese imports raised worries about supply, while potentially lower output in the Philippines amid an already tight inventory situation also lifted prices.
The most-traded November nickel contract on the Shanghai Futures Exchange SNIcv1 hit a record 161,600 yuan ($25,274.48) a tonne, while three-month nickel on the London Metal Exchange CMNI3 advanced as much as 2.2% to $21,425 a tonne, its highest since May 2014.
China’s September imports of nickel ore and nickel pig iron (NPI) fell 1.6% and 12.3% month-on-month, while ore output in the Philippines, the No. 1 supplier for China, could decline this year due to unfavourable weather.
There is a shortage of ferronickel in the market, said a trader.
Prices of NPI with nickel content of 10%-15% in China SMM-NIC-NPI15 rose to a record $1,502.50 a tonne. Chinese production of NPI – used in making stainless steel – has been disrupted due to a widespread power curb in the country.
Chinese NPI plants operated at their lowest level on record earlier this month, said Marex commodities broker Anna Stablum in a note, citing data from Marex Spectron’s joint venture partner Earth-I.
Brazilian miner Vale SA VALE3.SA saw third quarter output fell 22% year-on-year, while Russian miner Nornickel said its nickel production in January-September fell 23% year-on-year, despite a pickup in third-quarter output.
Refined nickel inventories in ShFE warehouses NI-STX-SGH have been hovering near a record low for weeks, while LME stocks of the metal MNISTX-TOTAL were at their lowest since December 2019 of 92,766 tonnes.
LME cash nickel was traded at a $83-a-tonne premium over the three-month contract CMNI0-3, the highest level since October 2019, indicating tightness of nearby inventories, with one party holding 40-49% of nickel warrants 0#LME-WHL, LME data showed.
Despite some dips in demand from the electric vehicle sector, overall demand for refined nickel is still optimistic, said Huatai Futures in a report.
FUNDAMENTALS
* LME copper CMCU3 dipped 0.1% to $10,173 a tonne at 0520 GMT, aluminium CMAL3 advanced 1.4% to $3,113.50 a tonne and zinc CMZN3 rose 1.8% to $3,626 a tonne.
* ShFE lead SPBcv1 rose 2.4% to 16,080 yuan a tonne, tin SSNcv1 advanced 3.5% to 295,060 yuan a tonne, copper SCFcv1 increased 1.5% to 74,760 yuan a tonne.
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($1 = 6.3938 yuan)
Nickel prices hit record high, supported by low inventorieshttps://tmsnrt.rs/3m2dhcs
(Reporting by Mai Nguyen in Hanoi; Editing by Krishna Chandra Eluri)
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