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The May nickel contract on the SHFE stood at 100,620 yuan ($15,922) per tonne as of 10.00 am Shanghai time, up by 800 yuan from the previous day’s close of 99,820 yuan per tonne.
Nickel prices continued to tick higher this morning, following a strong run on Monday, with a positive fundamental backdrop providing support for the metal.
“[Nickel’s] fundamental backdrop remains somewhat upbeat after the Philippine government steadfastly rejected the idea of lifting the ban on open-pit mining. In addition, optimistic projection on global nickel consumption from the electric vehicle industry has provided support for the market. That said, China is still getting its much-needed nickel ore from Indonesia,” according to Metal Bulletin analyst Andy Farida.
“Since the relaxation of Indonesia’s ore export ban, miners have ramped up output and the government has already granted 20 million tonnes of export quotas,” Farida added.
According to the International Nickel Study Group’s (INSG) latest statistics, total output from Indonesia has overtaken the Philippines to make it the number one nickel ore producer. The research group also reported that the global refined nickel market was in a deficit of 77,432 tonnes in January-November 2017, higher compared with the previous year’s level of 51,942 tonnes and that should provide nickel with some support in the medium term.
A weaker dollar and bouts of bargain hunting by investors has also lent support to base metals prices, ANZ Research noted on Tuesday.
Copper prices were also pushing higher this morning, with the most-traded SHFE April copper contract price up by 160 yuan or 0.3% to 51,870 yuan per tonne, mirroring a robust performance by copper on the London Metal Exchange yesterday.
The LME three-month copper price was up by $76 from Friday’s closing price at $6,831 per tonne on Monday. Stocks declined a net 2,375 tonnes to 333,850 tonnes with 3,025 tonnes freshly cancelled.
On the supply side, China’s state-owned electric utility company, State Grid Corp of China, has set its planned spending for 2018 at 485.4 billion yuan, an increase of 2.8% from the prior year, while actual spending for 2017 was around 4.2% higher than originally planned.
“[But] the details on the spending plan unveil a slightly more concerning picture for copper for 2018,” according to analysts with Citi.
“Volume of new power cable lines is expected to be down by 5% year on year [in 2018] – to approximately 52,000km. [Volume in] 2017 was up by 14% year on year. [However, the] shortfall in demand this year could be made up next year and hence will not have too negative an impact to sentiment,” Citi analysts added. Lead dips; other metals stronger
Currency moves and data releases