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Nickel led the charge higher with a gain of 2.8% as at 9.38am Shanghai time, with tin (+1.3%), lead (+1.1%) and zinc (+0.4) recording more marginal gains. Copper was little changed from its previous close while aluminium slid by 0.3%.
The stronger performance in nickel relative to its peers on the SHFE follows a similar performance on the London Metal Exchange on Wednesday, when the LME three-month nickel price closed up by 3% to surpass $14,400 per tonne.
The most-traded August nickel contract on the SHFE rose to 114,160 yuan ($16,597) per tonne as at 9.38am Shanghai time, up by 3,120 yuan per tonne, from Wednesday’s closing price of 111,040 yuan per tonne.
Nickel continues to benefit from a positive fundamental backdrop, but analysts have warned that prices may have run ahead of support.
“Strong demand from steel and the electronic vehicle sector, along with supply uncertainty, supported [nickel] prices. Technically, nickel prices entered overbought levels; this could trigger some profit booking after the strong price rally seen in the last few days,” analysts with ANZ Research said in a morning note.
More broadly, a slight softening of the US currency overnight has also lent support to the SHFE base metals this morning.
The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was at 97.13 as of 9.38am Shanghai time on Thursday, down by 0.06% from Wednesday’s closing price of 97.19.
This went some way to allaying market participants’ concerns over a ratcheting up in tensions between China and the United States, with the latter recently reiterating its threat to impose additional tariffs on Chinese goods.
Meanwhile, the US itself could be hit by sanctions from China if countervailing duties targeting 22 Chinese goods are not recalculated after the World Trade Organization appellate body determined on Tuesday that the US violated WTO rulings with those duties.
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