The most-traded July nickel contract on the SHFE increased to 102,800 yuan ($16,254) per tonne as of 10.00am Shanghai time, up by 260 yuan or 0.3% from the previous day’s close of 102,540 yuan per tonne.
A firmer dollar and geopolitical concerns over a potential trade war have led to weakness in most of the base metals on the SHFE this morning, the exception being nickel which is likely receiving support from the bullishness surrounding the metal’s usage in the electric vehicle (EV) sector.
“Growth in electric vehicles is likely to support the nickel market,” Metal Bulletin analyst William Adams said.
“It received a further boost on Monday after Chinese Premier Li Keqiang said buyers should continue to enjoy tax subsidy schemes and non-cash incentives. This is likely to boost sales of new EVs after sales of 777,000 units in 2017,” Adams added.
According to the China Association of Automobile Manufacturers, Beijing’s support for the sector is likely to push sales in 2018 above 1 million units. More than 40% of high-grade nickel, the very raw material for stainless steel, may be used in batteries by 2025, according to Nornickel.
The rest of the SHFE base metals succumbed to follow-through weakness in the early trading session today after base metals prices on the London Metal Exchange slumped overnight, with uncertainty stemming from the latest developments over the United States’ Section 232 probe sparking a sell-off in the complex. Other metals lower
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