July 15, 2019 / 1:55 AM / a month ago

METALS-Shanghai nickel hits 10-1/2-month high on Indonesian supply concerns

SINGAPORE, July 15 (Reuters) - Shanghai nickel prices on Monday surged to their highest in more than 10 months, tracking an overnight rally in London, on concerns that top producer Indonesia will resume an export ban on ore in 2022.

Indonesia, which has large nickel laterite ore reserves used to make nickel pig iron for the stainless steel industry, relaxed a ban to export nickel ore in 2017, but said at the time exports of unprocessed ore will be restricted again in 2022.

Many people had been sceptical that the full ban would be re-imposed, but a media report about sticking to the ban in 2022 created jitters in the market, pushing nickel on the London Metal Exchange to near a four-month high on Friday.

“Indonesian nickel ore export ban stoked fears of supply tightness, though the ban is for 2022 and will not impact immediate availability of the metal ore,” said ANZ in a note.

Shanghai nickel surged as much as 3.1% to 106,620 yuan ($15,508.81) a tonne, its highest since Sept. 3, 2018, while London nickel advanced 0.5%, as of 0134 GMT.

FUNDAMENTALS

* COPPER: Three-month copper on the London Metal Exchange edged up 0.1% to $5,939 a tonne, while the most-traded copper contract on the Shanghai Futures Exchange eased 0.1% to 46,620 yuan a tonne.

* PRICES: Other metals were traded in tight range as investors eyed a set of key data from China, including the economic growth by June that are due to be released by 0200 GMT.

* CHINA: China’s economic growth in the second quarter is expected to slow to its weakest pace in at least 27 years, reinforcing the case for more stimulus as a bruising trade war with the United States drags on, a Reuters poll showed.

* RARE EARTHS: The Pentagon is rapidly assessing the United States’ rare earths capability in a race to secure stable supply of the specialized material amid the country’s trade conflict with China, according to a government document seen by Reuters.

* TRADE TALKS: U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing “in the very near future,” White House adviser Peter Navarro said in an interview on CNBC on Friday.

* CHINA DATA: China’s June unwrought copper imports fell 27.2% from a year earlier to 326,000 tonnes, while copper concentrate CNC-COPORE-IMP imports in June dropped to a six-month low at 1.47 million tonnes, official data showed.

* LITHIUM: Chile’s Molymet has dropped a project to build battery parts in Chile, the second of three companies to pass on the deal little more than a year after winning guaranteed access to cheap Chilean lithium from top producer Albemarle.

* For the top stories in metals and other news, click or

MARKETS NEWS

* Asian shares started the week on a softer note after posting their first weekly decline since early June, while the dollar was on the defensive ahead of key economic data from China.

DATA/EVENTS (GMT)

0200 China Urban Investment YTD June

0200 China Industrial Output YY June

0200 China Retail Sales YY June

0200 China GDP YY Q2

0400 Indonesia Trade Balance June

0630 India WPI Inflation YY June

1000 EU Reserve Assets Total June

1300 Russia Industrial Output June

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.8748 Chinese yuan)

Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips

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