April 19, 2018 / 2:06 AM / 7 months ago

METALS-Shanghai nickel hits nearly 3-year top after LME rally

    By Manolo Serapio Jr
    MANILA, April 19 (Reuters) - Nickel futures in Shanghai
surged to the highest in almost three years on Thursday,
tracking a rally in London prices the session before in what
analysts said were misplaced concerns that the metal would also
be hit by U.S. sanctions.
    LME nickel surged to a three-year high on Wednesday as the
London Metal Exchange's previously announced move to delist two
brands from Russia's Norilsk Nickel, or Nornickel, for
delivery against its futures contracts took effect from April
18. Nornickel is the world's second-largest nickel producer.
    "Unlike aluminium, which saw explicit sanctions against
Rusal, there have been no explicit sanctions against nickel
producers," Commonwealth Bank of Australia analyst Vivek Dhar
said in a note.
    "However, markets are still concerned Norilsk Nickel, which
is linked with both Rusal and sanctioned oligarch Oleg
Deripaska, could eventually face sanctions."
    Nornickel accounts for about 9 percent of global nickel
supply.
    The most-traded nickel on the Shanghai Futures Exchange
 rose as much as 5.9 percent to 109,790 yuan ($17,490) a
tonne, its strongest level since June 2015. It was trading at
106,870 yuan by 0139 GMT, up 3 percent.
    Three-month LME nickel was up 0.5 percent at $15,355
a tonne, after peaking at $15,875 on Wednesday, the highest
since December 2014.
        
    ALUMINIUM STRENGTH: LME copper jumped more than 1
percent to $2,572 a tonne in early Asian deals, its loftiest
since August 2011, extending this month's rally spurred by
worries over tighter supply following U.S. sanctions on major
Russian producer Rusal that began on April 6.
    SHANGHAI METALS: Aluminium and zinc prices in Shanghai also
raced higher. Shanghai aluminium rose 2.3 percent to
15,215 yuan per tonne and zinc climbed 2.6 percent to
24,450 yuan.
    U.S. ALUMINIUM: Aluminium prices in the United States have
soared and are expected to diverge from those traded on the LME
after the U.S. Treasury Department imposed sanctions on Rusal.

    NICKEL DEFICIT:  The global nickel market deficit narrowed
to 2,500 tonnes in February from a revised deficit of 15,800
tonnes in the previous month, the International Nickel Study
Group said.
    BHP IRON ORE: BHP Billiton Ltd cut its 2018
fiscal year iron ore output guidance, citing issues in its
railroad car unloading system, after reporting an 8 percent rise
in third-quarter iron ore production.    
    MARKETS: Asian stocks rose, led by resource shares as oil
prices hit heights not seen since late 2014, though the
potential boost to inflation globally also pressured
fixed-income assets. The dollar was steady.  
 
        
    DATA/EVENT AHEAD (GMT)
    0800  Euro zone   Current account                Feb
    0830  UK          Retail sales                   Mar   
    1230  U.S.        Weekly jobless claims
    1230  U.S.        Philly Fed business index      Apr
    1245  U.S.        International Monetary Fund Managing
                      Director Christine Lagarde holds news
                      conference ahead of the spring meeting of
                      the IMF and World Bank 
    1400  U.S.        Leading index                  Mar
    
 BASE METALS PRICES                                0139 GMT
 Three month LME copper                                7014
 Most active ShFE copper                              51710
 Three month LME aluminium                           2555.5
 Most active ShFE aluminium                           15215
 Three month LME zinc                                  3247
 Most active ShFE zinc                                24450
 Three month LME lead                                2362.5
 Most active ShFE lead                                18380
 Three month LME nickel                               15355
 Most active ShFE nickel                             106870
 Three month LME tin                                  21575
 Most active ShFE tin                                145390
                                                           
 BASE METALS ARBITRAGE                                     
 LME/SHFE COPPER             LMESHFCUc3              414.12
 LME/SHFE ALUMINIUM          LMESHFALc3            -3382.73
 LME/SHFE ZINC               LMESHFZNc3              178.09
 LME/SHFE LEAD               LMESHFPBc3              286.53
 LME/SHFE NICKEL             LMESHFNIc3            -6813.05
 ($1 = 6.2775 Chinese yuan)

    
 (Reporting by Manolo Serapio Jr.; Editing by Gopakumar Warrier)
  
 
 
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