Nickel supported by lower inventories, strong demand seen


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December 8 (Reuters) – Nickel prices rose on Wednesday as stocks in Shanghai exchange warehouses hovered near record lows and the steel sector demand outlook remained strong.

The most-traded nickel contract in February on the Shanghai Futures Exchange rose 1.2% to 148,260 yuan ($ 23,334.07) per tonne as of 03:40 GMT. Three-month nickel on the London Metal Exchange rose 0.1% to $ 20,205 a tonne.

Refined nickel stocks in ShFE warehouses were 5,563 tonnes last week, hovering near a record low of 4,455 tonnes reached in August. LME metal stocks fell 58% from April to 110,358 tonnes, their lowest since December 2019.

The LME spot nickel premium on the three-month contract was $ 150.80 per tonne, indicating tight supplies nearby.

“We believe that the demand for nickel for stainless steel and non-stainless steel production will continue in 2022,” ANZ analysts said in a note, adding that demand was likely to be boosted by sales targets for electric vehicles and renewable energies.

FUNDAMENTALS

* ShFE copper rose 0.1% to 69,580 yuan per ton, aluminum gained 0.5% to 18,845 yuan per ton, zinc climbed 1.3% to 23,155 yuan per ton, lead increased 1.6% to 15,140 yuan per ton and tin increased 1.3% to 283,610 yuan per ton.

* LME copper fell 0.3% to $ 9,570 per tonne, aluminum rose 0.3% to $ 2,636.5 per tonne, zinc gained 0.3% to 3,234.5 $ and lead rose 0.9% to $ 2,205 per tonne.

* Peruvian government officials failed to negotiate a deal on Tuesday to unblock a key distribution corridor used by MMG Ltd’s Las Bambas copper mine, according to the meeting report seen by Reuters.

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MARKET NEWS

* The Australian dollar hit its highest level in a week amid a resumption in risk appetite on signs that Omicron may be less severe than other COVID-19 variants, but still vulnerable to vaccines existing.

* Asian stocks extended their gains, continuing a rally of global relief as markets found positive news in early reports on the potential impact of the Omicron variant, although oil price hikes have started to slow. ‘breathless.

($ 1 = 6.3538 Chinese yuan)

(Reporting by Eileen Soreng in Bengaluru; Editing by Subhranshu Sahu)

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