Nickel breaks $15,000, extends rally to new one-year peak
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
(Updates with closing prices, adds nickel deficit data)
By Eric Onstad
LONDON, July 18 (Reuters) - Nickel prices charged to a
one-year peak on Thursday as more speculators piled in,
prompting jitters among some investors that the rally had
entered bubble territory.
Nickel - used to make stainless steel and batteries for
electric vehicles - has surged by nearly a quarter since July 2
on the London Metal Exchange, fuelled by demand from a
combination of industrial buyers and speculators, traders say.
Shanghai nickel prices rose the maximum 6% on Thursday,
extending their rally into a ninth day.
"It's overbought, but the trend is clearly up," said
Gianclaudio Torlizzi, partner at consultancy T-Commodity in
Milan. "I know that lots of players are hedging by buying puts
in the market, that's the smart thing to do."
Xu Aidong, chief nickel analyst at research house Antaike,
said nickel's run was spurred by a 10% jump in China's stainless
steel output in the first half of the year.
A looming ban on Indonesian nickel ore exports is still
affecting prices even though it will not come into force until
2022, Xu added.
LME benchmark nickel climbed 2.8% to $14,850 a tonne
in closing open outcry activity, paring gains after touching
$15,115, the highest since June 29 last year.
Nickel volume was 19,476 lots at 1600 GMT, nearly surpassing
the combined levels for copper and aluminium, usually the
heaviest traded metals.
* SHANGHAI NICKEL: The most traded August nickel contract on
the Shanghai Futures Exchange rose to the highest since
June 29 last year.
Market open interest in Shanghai nickel, a measure of
liquidity, increased to the highest since April, and was up more
than 50% since July 5.
The trading volume for the most active contract on Thursday
was around 1.26 million lots, almost double the 30-day average.
* NICKEL DEFICIT: The global nickel market deficit widened
to 12,500 tonnes in May from a revised shortfall of 7,500 tonnes
in the previous month, data showed.
* NICKEL STOCKS/SPREADS: LME nickel inventories
<MNISTX-TOTAL> have slid by 43% over the past 12 months to the
weakest since January 2013.
The discount of cash LME nickel to the three-month contract
<CMNI0-3> more than halved to $31 a tonne by Wednesday's close
from $66 a day earlier, indicating tighter availability of
* COLUMN: Nickel jumps, but fear of Indonesia export ban is
unfounded: Andy Home
* TC/RCs: China's top copper smelters on Thursday lowered
their floor treatment and refining charges for the third quarter
* ZAMBIA COPPER: Copper output in Africa's second-largest
producer Zambia dropped 4% in the first six months of the year.
* PRICES: LME copper failed to trade in closing
rings and was bid up 0.03% at $5,982 a tonne, while aluminium
added 0.4% to $1,854.
Zinc shed 0.4% to end at $2,465 after touching
$2,504, the highest since July 1. Lead gained 2.1% to a
near four-month high of $2,049 and tin fell 0.5% to
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($1 = 6.8767 Chinese yuan)
(Additional reporting by Tom Daly in Beijing; Editing by
Kirsten Donovan, Emelia Sithole-Matarise and Jan Harvey)
First Published: 2019-07-18 04:15:37
Updated 2019-07-18 18:09:57
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