SINGAPORE – Shanghai nickel prices rose on Wednesday, tracking gains overnight in London, buoyed by supply concerns amid falling inventories and following an accident at major nickel producer Nornickel’s mine in Siberia.
The most-traded nickel contract on the Shanghai Futures Exchange (ShFE) rose as much as 4.8 percent to 132,210 yuan ($18,668.72) a ton, after benchmark nickel on the London Metal Exchange (LME) climbed 2.5 percent in the prior session.
The Shanghai contract ended up 3 percent at 129,970 yuan a ton.
Nickel stocks in LME-approved warehouses fell to 87,132 tons, hovering around their lowest since November 2011, latest data showed, while ShFE nickel inventories have picked up recently.
Three people were killed on Tuesday in an accident at major producer Norilsk Nickel’s Taimyr underground mine in Siberia, raising some supply concerns, but the fear quickly eased after the company said the mine was unaffected.
LME nickel fell 0.6 percent to $16,410 a ton, after traders and analysts said prices might have been overpriced after hitting a five-year high in September due to an export ban of nickel ore from top producer Indonesia.
The benchmark contract had leaped 76 percent from the beginning of 2019 to a five-year high on September 2, but has since fallen some 13 percent. However, traders noted some strong buying orders when prices fall, preventing a sharp drop in LME nickel prices.
“The vested interest by the big players are too big. Seems like they still have plenty of firepower. I doubt there’ll be many brave short sellers going against this kind of deep pockets,” said a nickel trader. – Reuters