GLOBAL NICKEL WRAP: Longstanding lack of arbitrage opportunities weighs on China premiums

The firmly-closed arbitrage window between the London Metal Exchange and Shanghai Futures Exchange manifested in lower China nickel premiums in the week to Tuesday July 28, with a lack of profit-making pushing deals lower, Fastmarkets heard.

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Long-lasting closed arb weighs on China premiums
The Shanghai nickel premiums moved lower in the week to Tuesday July 28 with the long-lasting closure of the arbitrage window between London and Shanghai pressuring down the market, Fastmarkets learned.
Fastmarkets assessed the nickel, min 99.8%, full plate premium, cif Shanghai at $100-130 per tonne on Tuesday, down by $10 per tonne or 8% from $110-140 per tonne a week prior.
Fastmarkets’ assessment of the nickel, min 99.8%, full plate premium, in-whs Shanghai also fell in line with the cif premium to $100-130 per tonne the same day.
There was no import interest amid the sustained arbitrage loss, though offers were lowered significantly, sources told Fastmarkets.

“I heard offers at around $110...

Published

Orla O'Sullivan

Amy Hinton

Sally Zhang

July 29, 2020

12:48 GMT

London