SHANGHAI, May 24 (SMM) – Shanghai nickel hit its daily upper limit in the last 30 minutes before the closing bell on Friday May 24, likely driven by unrest in Indonesia, the world’s largest nickel ore producer and a major producer of stainless steel and ferronickel.

The most active nickel July contract on the Shanghai Futures Exchange finished the trading day more than 3% higher, making the metal the best performer across the nonferrous complex, which broadly rebounded on the day.

A short-covering primarily accounted for the jump in SHFE nickel. Open interest for the SHFE 1907 contract shrank 22,204 lots on the day.

Violence erupted in Jakarta, Indonesia’s capital, earlier this week in the wake of its presidential election results, which might impact local nickel ore mining and triggered fears of export disruption.

The violence also rekindled concerns about Chinese business operations in the world’s most populous Muslim country. Chinese businesses came under attack during riots in Jakarta in 1998.

Nickel fundamentals, however, remained weak. New nickel pig iron (NPI) capacity came online as expected, while rising stainless steel inventories weighed on prices.

Spot nickel trades did not perform strongly. Russian nickel premiums fell to 100 yuan/mt this week, from 300 yuan/mt in the previous week, while Jinchuan premiums slipped from 3,000 yuan/mt to 1,100 yuan/mt. Traders continued to see limited shipments.