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The most-traded May nickel contract on the SHFE increased by 670 yuan or 0.7% to 101,090 yuan ($15,510) per tonne as of 10.12am Shanghai time.
On Wednesday, the LME three-month nickel price closed up by 1.8% on the previous day’s close, having hit an intraday high of $13,200 per tonne earlier in the day with robust demand from the stainless steel sector amid a tighter market boosting prices.
“With profitable stainless steel production, the output of stainless steel will stay at high levels, which then will support the demand for nickel,” China’s Galaxy Futures noted on Thursday.
“The nickel supply shortage is likely to continue as the London-Shanghai import arbitrage window remains closed,” the broker added.
Metal Bulletin’s arbitrage calculation showed a loss of $585.22 per tonne for imported nickel to Shanghai on Wednesday.
Another factor pushing nickel prices upward are higher Chinese import duties since the start of the year and higher long-term contract premiums.
“Beijing is charging higher fees to import refined nickel into the country – with the government raising the tax to 2% from 1% previously,” a Shanghai-based nickel analyst said. Base metals prices higher; lead slips
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