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Shanghai nickel buoyed by low stocks, posts best day in two weeks

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Dec 8 (Reuters) - Shanghai nickel prices rose on Wednesday to record their best session in two weeks, as inventories in the city's exchange warehouses hovered near record lows, while the demand outlook remained robust.

The most actively traded February nickel contract on the Shanghai Futures Exchange closed 1.1% higher at 148,200 yuan ($23,329.03) a tonne, after rising as much as 2.1% earlier in the session.

Three-month nickel on the London Metal Exchange was flat at $20,180 a tonne as of 0735 GMT.

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Refined nickel inventories in ShFE warehouses were at 5,563 tonnes last week, hovering near a record low of 4,455 tonnes hit in August. LME stocks of the metal fell 58% from April to 110,358 tonnes, their lowest since December 2019.

LME cash nickel premium over the three-month contract was $150.80 a tonne, indicating tight nearby supplies.

"We believe demand for nickel for the production of stainless steel and non-stainless steel will hold up in 2022," analysts at ANZ said in a note, adding that demand was likely to get a boost from targets for electric vehicle sales and renewables.

* ShFE copper rose 0.1% to 69,570 yuan a tonne, aluminium gained 0.6% to 18,870 yuan a tonne, zinc climbed 1.4% to 23,175 yuan a tonne, tin rose 1.1% to 283,090 yuan a tonne and lead rose 1.9% to 15,175 yuan a tonne.

* LME copper edged 0.3% lower to $9,580.5 a tonne, aluminium was up 0.1% at $2,626.75 a tonne, zinc gained 0.4% to $3,239.5 and lead was 1.1% higher at $2,210 a tonne.

* Copper prices are likely to retreat below $9,000/tonne over the next one or two months as seasonal factors loosen the physical market, and China demand weakens against a backdrop of tapering by the U.S. Federal Reserve, Citi said in a note.

* Peruvian government officials failed to broker a deal on Tuesday to unblock a key distribution corridor used by MMG Ltd's (1208.HK) Las Bambas copper mine, according to minutes of the meeting seen by Reuters. read more

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($1 = 6.3526 Chinese yuan renminbi)

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Reporting by Eileen Soreng in Bengaluru; Editing by Subhranshu Sahu and Devika Syamnath

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