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The most-traded September nickel contract jumped to 116,150 yuan ($17,937) per tonne, up 2.1% or 2,400 yuan per tonne from Wednesday’s closing price.
The strength in Asia this morning follows a robust performance by the three-month nickel price on the London Metal Exchange on Wednesday, when it closed up by 1.4% or $320 per tonne at $15,190 per tonne.
Nickel prices have been supported by strong fundamentals, namely firm demand and declining inventory levels, which has allowed the metal to shrug off the escalating trade tensions between China and the United States.
“Stockpiles on the LME are now down nearly 25% since the start of the year, to 275,600 tonnes. The last month alone has seen them fall approximately 13%. While demand from both the stainless steel and electric vehicle sectors has been strong, supply issues have also supported prices,” ANZ Research noted on Thursday.
“Reports suggest environmental curbs have seen Chinese NPI (nickel pig iron) production suffer in recent months,” it added.
Earlier this month, Metal Bulletin reported that environmental inspection-related disruptions at NPI smelters in northern and eastern China could remove as much as 5,000 tonnes per month of downstream nickel supply from the Chinese market.
Smelter sources in the affected regions said that they had not received official orders to shut down their production lines or reduce their operating rates, instead they had done so automatically out of fear of failing to meet the inspection group’s required standards.
Meanwhile, copper prices were the weakest of the SHFE complex this morning, with heightening trade tensions continuing to stir up fears that additional tariffs could affect economic growth.
On June 15, the US announced plans to impose a 25% tariff on $50 billion of Chinese imports which included a wide range of China-made metal-making and mining machinery.
In response, Beijing said it would hit 659 US products worth $50 billion – including agricultural products, cars and marine products – with a similar tax.
On June 18, US President Trump asked the US Trade Representative to identify $200 billion worth of Chinese imports for additional tariffs of 10% – with another $200 billion after that if Beijing retaliates.
“We are also worrying about the escalating trade war after both sides announced plans to impose new tariffs on each other,” a trader in Shanghai said.
The rest of the complex was little changed to firmer after consolidation set in following the base metals’ recent run of weakness.
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