Following the weakness seen at the start of the week
, nickel has rebounded strongly this morning. The most-traded December nickel contract on the SHFE climbed to 129,120 yuan ($18,240) per tonne as at 10.15am Shanghai time, up by 3,430 - or 2.73% - from Tuesday’s close of 125,690 yuan per tonne.
The recovery follows a similar performance by the London Metal Exchange’s three-month nickel price on Tuesday, when it closed at $16,525 per tonne to record a gain of 2.6%
from the previous day’s close of $16,000 per tonne.
Supporting the upward move in nickel prices was a continued draw on LME inventories despite the emergence of a contango in the exchange’s cash/three-month spread. Consistent drawdowns in these conditions have given rise to speculation that Chinese consumers, including stainless steel giant Tsingshan, were actively stockpiling material in anticipation of a shortfall as a result of the Indonesian ore ban coming into effect in January 2020.
LME nickel stocks totaled 87,132 tonnes on Tuesday, a decline of 47% from the 164,274 tonnes recorded on September 16. SHFE nickel stocks totaled 23,993 tonnes on October 18, up by 797 tonnes from a week earlier.
In supply news, Russian multi-metal miner Nornickel confirmed on Tuesday that three people had been killed in an accident at its Taimyr mine in Siberia
. The company, which is Russia’s largest miner and the second-largest global nickel producer, has not released particulars surrounding the accident as yet but the mine is believed to still be operational.
- In the other base metals, tin gave the second-best performance with its most-traded January contract ticking up by 0.4%. The rest were weaker, ranged between a 0.1% drop in December aluminium and a 1% drop in December lead.
- The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was up by 0.07% at 97.55 as at 10.16am Shanghai time.
- The Shanghai Composite Index was down by 0.15%, at 2,950.03 as at 10.44am Shanghai time.
- In data on Tuesday, CBI industrial order expectations from the United Kingdom came in at -37, below the expected -25.
- Existing home sales in the United States were similarly disappointing at a seasonally adjusted 5.38 million units in September, down from 5.50 million units previously. The Richmond manufacturing index surprised to the upside, with a reading of 8, significantly beating the expected reading of -7.
- In data on Wednesday, consumer confidence from the European Union and US weekly crude oil inventories are of note.