China’s largest nickel producer Jinchuan Group raised its nickel price on Tuesday June 4 after a surge in London Metal Exchange prices following reports of a large purchase by China’s State Reserve Bureau (SRB).

The benchmark price from Jinchuan stood at 106,500 yuan ($14,734) per tonne on Tuesday, up 2,000 yuan from 104,500 yuan per tonne on May 28.

Nickel prices gained 2.5% in Monday’s official trading on the LME, with major support from encouraging official purchasing managers’ index data from China and SRB purchase reports.

The Financial Times carried a report claiming that the SRB had bought 30,000 tonnes of nickel in recent months, while Reuters reported that the agency may have bought a total of 60,000 tonnes this year.

“As far as we know, the SRB started nickel purchase late last year and we hear they are still buying the material this year [...] in the months after the Spring Festival [in February],” a trader in Shanghai said, adding it is difficult to know the total number of nickel bought.

“I think the numbers of 30,000 tonnes or 60,000 tonnes are too exaggerated. Total inventory of local bonded warehouse is 70,000 tonnes at the moment, so if they buy from the local market, the inventory should be very low now,” a trader from Wenzhou, Zhejiang province, said.

“Why did [SRB] not buy from the domestic market as local prices were lower than price of imported material,” the trader added.

“Let’s keep an eye on the customs data in the coming months to say whether it’s true or not,” an analyst said.

Domestic spot nickel prices on the Changjiang Nonferrous Metals Market were at 105,800-106,800 yuan per tonne on Tuesday, 1,200 yuan higher than Monday prices.