Top Stories
Top Stories
Wires

METALS-Nickel leaps to 16-month high on Indonesian supply fears

Peter Hobson

* Indonesia could accelerate reintroduction of ore export ban

* Shanghai nickel hits record high

* LME stocks at lowest level since 2013 (Updates throughout, changes dateline from SINGAPORE/MELBOURNE)

LONDON, Aug 8 (Reuters) - Nickel prices rose almost 5% to a 16-month high on Thursday as fears rippled through the market over the possibility that major supplier Indonesia could bring forward a ban on exports of nickel ore.

Other industrial metals also firmed after strong Chinese export data suggested that demand in the world's largest metals consumer might hold up better than expected.

Benchmark nickel on the London Metal Exchange (LME) at one stage shot up more than 12% to $16,690 a tonne, equalling an April 2018 high, before retreating to $15,530 and a 4.9% gain by 0955 GMT.

The most-traded nickel contract on the Shanghai Futures Exchange (ShFE) climbed 6% to a record high of 124,890 yuan ($17,732.50) a tonne.

The metal used in stainless steel is up almost 50% this year on the LME.

The upward price momentum was driven by uncertainty over Indonesia's plans to ban ore exports and the potential for a renewed ban to create shortfalls in China, said ING analyst Wenyu Yao.

INDONESIA: The country's ban on ore exports was relaxed in 2017 for a period of five years. Asked if the ban could be restoired ahead of schedule, an Indonesian official told Reuters on Thursday that this remained "uncertain."

NICKEL TIGHTNESS: The discount for cash nickel against three-month metal on the LME has shrunk to $8 a tonne from about $80 in June, pointing to lower nearby supply. <MNI0-3>

Stocks of nickel in LME-registered warehouses, at about 140,000 tonnes, are down from around 370,000 tonnes at the start of 2018 and at the lowest level since 2013. One dominant holder controls between 50% and 79% of warrants. <MNISTX-TOTAL> <0#LME-WHL>

Inventories in ShFE warehouses have tripled to almost 30,000 tonnes since June but are far below levels in 2016 and 2017. <SNI-TOTAL-D>

OPEN INTEREST: On both the LME and ShFE, open interest in nickel is at or near record highs. <MNI-OI-TOT>

CHINA: Exports from China unexpectedly returned to growth in July on improved global demand, but the rebound could be short-lived as Washington prepares more tariffs on Chinese goods.

China's commodities imports surged in July, with unwrought copper imports bouncing back after two months of declines and copper concentrate imports hitting a record high.

MARKETS/YUAN: The export data helped Chinese stock markets and the yuan currency to steady after steep falls in recent days.

CHILE: Copper output from Chilean miner Codelco fell 12.1% year on year to 769,400 tonnes in the first half of 2019.

OTHER METALS: LME copper was up 0.9% at $5,755.50 a tonne, aluminum rose 1.6% to $1,772, zinc gained 0.6% to $2,275, lead was up 1.7% at $2,035.50 and tin rallied 0.8% to $16,885.

(Reporting by Peter Hobson Additional reporting by Mai Nguyen, Melanie Burton and Tom Daly Editing by David Goodman)