Macroeconomics, supply concerns bolster Shanghai nickel prices 

SHANGHAI, Jul 15 (SMM) – Shanghai nickel prices extended their increases on Monday July 15 with the most-active SHFE nickel contract climbing to nearly a year-high of 107,000 yuan/mt, driven by improved macroeconomic sentiment, robust ferrous metal prices, and a lower US dollar on expectations of a US interest-rate cut. 

SMM expects upbeat sentiment to further buoy nickel prices in the short term, but the steady release of nickel pig iron (NPI) new capacity will cap upward room.

Prices of nickel also received a boost from supply concerns that major producer Indonesia will resume an export ban on nickel ore, though the ban is for 2022 and will not immediately impact availability of the metal ore. 

SMM learned that an Indonesia earthquake suspended shipments of nickel ore from local mines as of Monday July 15. 

On fundamentals, the current domestic oversupply of NPI stood below expectations while the market expected a considerable glut in the third quarter, the latest SMM survey showed. 

Producers of stainless steel did not slash production as much as expected. This, together with the prospect of an upcoming high season, will also support nickel prices. 

On Monday July 15, the most-traded SHFE August nickel contract closed 2.4% higher at 105,930 yuan/mt, with a weekly gain of 5.6%.