Nickel continued its march higher on Thursday, hitting a one-year high above $1,500 a tonne.
The metal, which is used to make stainless steel, has been on a tear since the start of the month, rising by more than a fifth and outpacing other industrial metals, which are still weighed down by trade war fears.
Nickel for delivery in three months on the London Metal Exchange rose as much as 5 per cent, to $15,115 before falling bac to $14,895.
Meanwhile, open interest in nickel futures on the Shanghai Futures Exchange has jumped more than 50 per cent in the past couple of weeks to more than 600,000 lots. Glencore, Vale and Norilsk Nickel are among the world’s biggest producers of the metal, which has a reputation for being volatile.
同时，上海期货交易所(Shanghai Futures Exchange)的镍期货持仓量在过去两周飙升逾50%，至超过60万手。嘉能可(Glencore)、淡水河谷(Vale)和诺里尔斯克镍业(Norilsk Nickel)跻身这种金属的世界最大生产商之列。镍价以波动性较大闻名。
A number of factors have helped push up the price, including strong demand in China where production of “300 series” stainless steel — which has a high nickel content — has surged 13 per cent year-on-year in June.
“This rally started in Shanghai with better than expected stainless production in China leading to heavy buying [on the Shanghai Future Exchange] by one large consumer,” said analysts at Macquarie. “Combined with reported heavy forward buying by European auto producers on the 2023 contract (for future electric vehicle demand), drove prices though key levels causing major short covering of speculative positions and, more recently . . . chart-based buying.”
Nickel is tipped to be one of the metals that benefits from the shift to cleaner forms of energy. It is a key component in the battery packs that will power electric vehicles — and one that is forecast to become more important as carmakers switch to technologies that use more of the metal.
But with sulphide nickel ore sources — the mainstay of the industry and the material best suited to making battery-grade nickel — in short supply, there has been much excitement among analysts and investors about a potential supply crunch and ultimately higher prices. For the moment EV’s account for just 4 per cent of nickel demand.
However, not everyone is convinced the current rally is sustainable, pointing to rising stainless steel inventories in China, raising questions about the strength of underlying demand.
“We are of the view that the quick rebound is not justified as underlying stainless steel demand in China remains uncertain and supply risks in Indonesia and the Philippines should remain remote through 2019,” said Helen Lau, an analyst at Argonaut, a brokerage.
On Thursday, a senior Indonesian mining ministry official said the country would enforce a ban on the export of unprocessed minerals by 2022. Indonesia is a major producer of nickel ore alongside the Philippines, where another round of mine audits has just started. However, a large scale production halts in the country are seen as unlikely by analyst.
“Our read of the actual fundamentals is for a more-balanced market in the second half of 2019 compared with large deficits up until midyear since end-2015,” said Macquarie. “We also believe prices have overshot levels that can be justified by fundamentals, and so will correct at some stage, probably once the commodity trading advisers decide to take profits.”