Nickel prices hit 7-year highs as demand creates shortages, Auto News, ET Auto
LONDON: Nickel prices jumped to their highest level in more than seven years on Friday amid shortages created by a surge in demand from stainless steel mills and electric vehicle battery makers and slippery inventories.
Benchmark nickel on the London Metal Exchange traded up 0.8% to $ 20,500 a tonne in official rings after hitting $ 20,705, its highest since May 2014. The contract is up almost 30% from the 2021 lows reached in March.
Macquarie analyst Jim Lennon expects nickel consumption to increase 17% this year to 2.8 million tonnes.
“Stainless steel production, the main use of nickel, is expected to increase 16% this year, adding 250,000 tonnes to the demand for nickel. Nickel used in batteries is expected to increase 100,000 tonnes this year to around 290,000. tonnes, ”Lennon said.
“The nickel market has slipped into a significant deficit … despite strong growth in Indonesian nickel supply of over 300,000 tonnes this year.”
CHINA: Nickel prices hit a record high on the Shanghai Futures Exchange (ShFE).
Steel mills, mainly in China, account for about two-thirds of global nickel consumption.
INVENTORIES: Inventories are used to fill the supply gap.
Nickel stocks in warehouses monitored by the ShFE at 8,608 tonnes have more than halved since the end of last year. They fell to an all-time high of 4,455 tonnes in August.
In warehouses registered with the LME, stocks at 179,394 tonnes have plummeted by more than 30% since mid-April.
SPREADS: Supply concerns created a premium for cash over the three-month nickel contract.
ALUMINUM: Concerns over production restrictions in China to control emissions and fears of disruption at major bauxite producer Guinea due to political unrest have propelled aluminum prices to $ 2,915.50 , their highest level in 13 years.
It was last up 2.3% at $ 2,906 a tonne.
OTHER METALS: Positive sentiment and the weaker dollar index supported industrial metals overall.
Copper rose 1.5% to $ 9,533 a tonne, zinc gained 0.8% to $ 3,100, lead added 1% to $ 2,323 and tin climbed 1.8% at $ 33,900.