Shanghai Nickel Hits 3-Week High Amid Supply Concerns

February 22, 2024, 03.18 PM | Source: Reuters
Shanghai Nickel Hits 3-Week High Amid Supply Concerns

METAL COMMODITY - BEIJING. Shanghai nickel prices jumped more than 3% on Thursday to a three-week high, as potential U.S. sanctions on Russia stoked supply concerns.

The most-traded March nickel contract on the Shanghai Futures Exchange closed day-time trade 3.2% higher at 131,320 yuan ($18,265.27) a metric ton, hitting its highest level since Jan. 29.

Three-month nickel on the London Metal Exchange climbed 0.4% to $16,990 per ton by 0743 GMT, having jumped 3.6% in the previous session and posting the biggest daily gain since last November.

U.S. President Joe Biden said Washington plans to unveil a major sanctions package against Moscow on Friday. That triggered speculation on the metals Russia exports, which are a major source of revenue for the country.

Russia is a main producer of nickel and aluminium.

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Also weighing on supply was the issuance of mining permit in Indonesia, the world's top producer of nickel, said analysts at Guotou Anxin Futures.

Nickel is mainly used to make stainless steel and new energy battery.

Meanwhile, market risk appetite was boosted by China making its biggest ever reduction in the benchmark mortgage rate earlier this week.

Elsewhere, LME aluminium climbed 0.6% to $2,232.50, copper was up 0.6% at $8,591, zinc rose 0.8% to $2,412.50, lead gained 0.3% to $2,083 and tin rose 0.4% to $26,395.

The dollar edged broadly lower as traders awaited a slew of business activity surveys to gauge the health of major economies and what that may mean for the global interest rate outlook.

A weaker dollar supports metal prices as it makes it cheaper to buy the greenback-priced commodity.

SHFE aluminium slipped 0.5% to 18,810 yuan a ton, copper was up 0.5% at 69,160 yuan, tin dipped 0.2% to 217,920 yuan, zinc gained 0.4% to 20,430 yuan, and lead ticked 0.3% higher to 15,865 yuan.

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Editor: Wahyu T.Rahmawati

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