The most-traded September nickel contract price on the SHFE fell to 115,940 yuan ($18,135) per tonne as at 09.58am Shanghai time, down by 2,070 yuan per tonne from Thursday’s closing price.
“Prices for stainless steel remain at a high level which has led to [some resistance] from downstream buyers. Nickel prices are also under pressure in such circumstances,” Citic Futures Research said.
But given that supply remains tight, coupled with continual declines in inventory levels, the outlook for nickel remains bullish overall, according to market observers.
Yet given the substantial rise in nickel prices over the past few weeks, prices have become increasingly vulnerable to profit-taking, compounded by the fact that more conservative traders are inclined to lock in some profits by the end of the trading week.
The most-traded nickel contract price on the SHFE has shown an increase of 8,130 yuan per tonne (or 7.5%) from 107,810 yuan per tonne at the close on May 24.
Meanwhile, copper prices also succumbed to profit-taking this morning after logging continual gains earlier in the week.
The most-traded August copper contract price fell by 220 yuan per tonne to 53,940 yuan per tonne as at 09.58am Shanghai time, but remains 2,460 yuan per tonne (or 4.8%) higher than June 1’s closing price of 51,480 yuan per tonne.
Analysts see stable strength in the Chinese copper market in the short term due to the country’s latest round of environmental inspections and the ongoing labor negotiations at the world’s largest copper mine, Escondida.
Environmental inspection teams have been dispatched to 10 provinces in China to review the progress made in curbing pollution since the end of May, with primary copper smelting capacities in important regional hubs such as Jiangxi province having been partly suspended.
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