August 16, 2019 / 5:31 AM / 2 months ago

METALS-Shanghai nickel jumps, LME 3-month spread at decade high

(Updates prices, adds details)

By Mai Nguyen

SINGAPORE, Aug 16 (Reuters) - Shanghai nickel prices surged, while a key indicator of supply shortage jumped to a decade high on Friday, amid ongoing worries about supplies disruption from top ore producer Indonesia.

Shanghai Futures Exchange’s most active nickel contract rose as much as 3.7% to 127,700 yuan ($18,132.51) a tonne, hovering near a record high hit on Monday. It ended up 2.3% at close, locking in some 10% gain for the week.

Meanwhile, the premiums of LME nickel cash over three-month contract CMNI0-3 jumped to $40 a tonne, a decade high, signalling tight nearby supplies and amid ongoing concerns over potential supply disruption from top ore producer Indonesia.

London Metal Exchange benchmark nickel fell 0.5% by 0713 GMT but was on track for its third consecutive weekly gains and has surged 51% so far this year.

Markets have been worried over a possibility that Indonesia, the world’s biggest nickel ore producer, could bring forward an export ban on mineral ore, due in 2022, to as early as this year, as it wants to boost value of exported products.

Indonesia’s President Joko Widodo said on Friday the country should push further to develop a downstream industry domestically to process natural and mineral resources including bauxite and nickel.

He is due to make a decision whether to bring forward the ore export ban.

FUNDAMENTALS

* CHINA NICKEL: China’s spot price for imported refined nickel SMM-NIC-IMP rose to near five-year high at 126,050 yuan a tonne, data by Shanghai Metals Market showed.

* CHINA OUTPUT: China produced 801,000 tonnes of refined copper in July, up 4.8% year-on-year, while alumina output was up 2.9% in the same period to 6.22 million tonnes, official data showed.

* CONFLICTING MESSAGES: U.S. President Donald Trump said U.S. and Chinese negotiators were holding “productive” talks and expected them to meet in September. Meanwhile, China vowed to counter the latest U.S. tariffs but called on the United States to meet it halfway on a potential trade deal.

* “A meaningful trade deal is unlikely to be reached before the next US Presidential elections in late 2020. We expect most base metal prices to remain weak over the coming months... with the exception of nickel which continues to show resilience due to supply-side fears in Indonesia,” Fitch said in a note.

* ALUMINIUM: Shanghai aluminium jumped 2% this week, the strongest weekly gain since July 2018, amid supply disruption concerns following recent flooding in China. LME aluminium rose 0.3%.

* SHFE STOCKS: Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 4.1% from last Friday, the exchange said.

* PRICES: London copper increased 0.2%, zinc advanced 0.5% while tin dropped 2%. Shanghai copper rose 0.3%, zinc advanced 0.2% while lead jumped 0.8% and tin fell 0.8%.

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

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 = 7.0426 Chinese yuan)

Reporting by Mai Nguyen; Editing by Rashmi Aich and Uttaresh.V

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