Nickel prices hit their highest in nearly two weeks on Thursday, as investors who bet on falling prices had to buy in at a strong support level.
Nickel prices have fallen in the past weeks to touch a five-month low of $12,900 a tonne on the London Metal Exchange (LME) on Tuesday, as the market viewed prices more expensive than supply and demand fundamentals indicated.
“$13,000 was a critical number to defend,” said a trader.
Three-month nickel on the LME on Thursday climbed as much as 0.9% to $13,980 a tonne, its highest since Nov. 29.
The most-traded nickel contract on the Shanghai Futures Exchange (ShFE) jumped as high as 3.5% to 110,570 yuan ($15,708.42) a tonne, nearing a two-week high, before ending at 110,190 yuan a tonne, up 3.1% from the previous close.
Other nickel industry players said that a royalty hike in top nickel ore producer Indonesia contributed to a bullish view on prices, but they expressed uncertainty over how long the upward trend could last.
FUNDAMENTALS
* SPREAD: The LME cash nickel contract was last at a $65 a tonne discount to the three-month contract, suggesting sufficient nearby supplies.
* NICKEL STOCKS: LME on-warrant nickel inventories, or those available to the market, rose to a 2-1/2-month high at 67,248 tonnes. MNISTX-TOTAL
* ALUMINIUM STOCKS & SPREAD: LME headline aluminium stocks MALSTX-TOTAL jumped to their highest since April 2018 at 1.33 million tonnes, and the spread between the cash and three-month contract flipped to a discount of $8.75 a tonne after mostly holding in the premium zone for around a month. CMAL0-3
* OTHER PRICES: LME zinc advanced 1.3% to $2,250 a tonne at 0712 GMT, while copper fell 0.3% to $6,139 a tonne and aluminium rose 0.3% to $1,766 a tonne. ShFE copper rallied 0.5% to 49,030 yuan a tonne and zinc jumped 1.1% while aluminium fell 0.3%.
* TRADE TALKS: U.S. President Donald Trump is expected to meet with top trade advisers on Thursday to discuss planned Dec. 15 tariffs on some $160 billion in Chinese goods, sources told Reuters.
* JIANGXI COPPER: Jiangxi Copper Co,, one of China’s biggest copper producers, said it will receive “financial assistance” to the tune of 1.5 billion yuan from its parent to repay loans and cut financing costs.
