Nickel hits 6-week high as steel rallies in China

21 October 2017

London nickel futures jumped to a six-week high on Friday, supported by a rally in Chinese steel prices as investors looked to more production curbs in the world’s top steel producer.

The output curbs are in line with China’s orders for industrial plants to limit pollution over winter. But steel producers in some northern cities were ordered to cut output this month or a month ahead of schedule.

Copper prices edged higher as some investors beefed up positions following overnight losses, with the metal on track to post its fourth weekly rise even after retreating from three-year highs.

Copper at the start of the week rallied above $7,000 a tonne for the first time since July 2014.

Traders said the modest pullback in copper on Thursday was in reaction to data showing that economic growth in China, the world’s biggest metals consumer, was in line with expectations.

While some interpreted the data as supportive of Chinese industrial activity, ANZ Bank noted investors in the sector remained cautious.

NICKEL: Three-month nickel on the London Metal Exchange was up 3.4 percent at $12,135 a tonne by 0742 GMT, after earlier hitting $12,165, its loftiest since Sept. 8. Used mainly to make stainless steel, nickel has gained almost 4 percent this week, on course for a fourth weekly rise.

SHANGHAI: The most-traded nickel contract on the Shanghai Futures Exchange closed up 3.6 percent at 97,650 yuan a tonne, just off the day’s peak of 97,680 yuan, its strongest since Sept. 4.

CHINA STEEL: Chinese steel futures surged more than 4 percent on expectations of more production cuts, with the rally also lifting prices prices of raw materials iron ore and coking coal.

COPPER: LME copper rose 1 percent to $7,036.50 a tonne, and has gained more than 2 percent so far this week. Shanghai copper advanced 0.6 percent to 55,100 yuan a tonne.

JIANGXI COPPER: State-owned China metals firm Jiangxi Copper Co Ltd plans to make an acquisition in mineral-rich Africa, president and chairman Long Ziping said, as the country’s top integrated copper producer aims to step up overseas expansion.

ALUMINA SHORTAGE: Shortages of alumina, the raw material for producing aluminium, may become more severe in the coming months as an environmental crackdown in China is due to shut capacity, forcing smelters to scramble for supplies and pushing up prices.

ALUMINIUM: LME aluminium rose 0.6 percent to $2,165 a tonne, supported by a third-straight month of falling output in China, which is also cracking down on polluting smelters. Shanghai aluminium jumped 1.5 percent to 16,325 yuan.

GLENCORE ALUMINA: Ukraine’s anti-monopoly committee has given commodities trader Glencore the green light to take a stake in Ukraine’s Mykolaiv plant, the second-largest alumina asset of Russia’s Rusal.

JAPAN ALUMINIUM ENDORSEMENT: Four Japanese automakers said on Thursday they found no safety issues with aluminium parts supplied by Kobe Steel Ltd, allaying some concerns that falsified quality data on products from the steelmaker had compromised their vehicles.

KOBE STEEL: The Japanese government wants to get actively involved in the issue of Kobe Steel’s data fabrications as the company’s widespread misconduct has sent a chill along global supply chains.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.6123 Chinese yuan)