Nickel prices outperformed, tracking the recent strength of prices on the London Metal Exchange, while aluminium prices were supported by news that the United States will impose Section 232 tariffs of 25% on steel imports and 10% on aluminium imports from Canada, Mexico and the European Union.
The most-traded July nickel contract price on the SHFE stood at 117,480 yuan ($18,325) per tonne as at 10:47 am Shanghai time, up by 2,660 yuan per tonne from Thursday’s close.
Nickel’s consistent supply outflows are propping up prices, with upward moves further supported by the more enduring factors of strong stainless steel demand and electric vehicle developments.
Nickel stocks at London Metal Exchange warehouses have declined 21% since the beginning of the year, last at 290,604 tonnes on Thursday, compared with 366,612 tonnes on January 2. Meanwhile, nickel inventories at SHFE-listed sheds have declined by 34% since the start of 2018, falling from 48,920 tonnes on January 5 to 32,286 as at May 25.
Aluminium prices, meanwhile, have found support from the US’ imposition of tariffs against Canada, Mexico and the EU.
“The decision by President Trump to push ahead with tariffs on aluminium and steel imports into the US saw aluminium prices well supported. With the tariff unlikely to induce more US supply, prices are likely to push higher as the cost of imported aluminium rises,” ANZ Research noted on Friday.
But the renewed trade tensions have pressured other markets this morning, with participants becoming more cautious, putting a cap on gains in the other base metals prices.
Adding further pressure to the base metals was China’s softer-than-expected Caixin manufacturing purchasing managers’ index (PMI) release on Friday, which showed only modest expansion in China’s manufacturing sector in May.
The Caixin PMI came in at 51.1 for May, unchanged from April, but below an expected print of 51.3. A reading above 50 indicates expansion; a reading below signals contraction. Base metals prices
Currency moves and data releases