SHANGHAI, Aug 8 (SMM) – Shanghai nickel hit its upper daily limit in early morning trade on Thursday August 8, bolstered by funds buying.
The most active October nickel contract on the Shanghai Futures Exchange rose 5.99% to a new record high of 124,890 yuan/mt, as of CST 9:55 August 8, with a sharp increase in open interest.
Uncertainties surrounding Indonesia’s ban on raw ore exports and robust demand kept the market in bullish mood.
China’s nickel ore market is likely to see tightness in the remainder of the year if Indonesia stops granting export quotas and brings forward the export band from the previously scheduled 2022, showed SMM calculations.
Chinese stainless steel mills, meanwhile, swung to high gear, which boosted demand for ferronickel and put the market in a tight balance. Stable production of stainless steel in Indonesia kept local demand for ferronickel steady.
SMM also learned that steel mills planned higher production for August, supported by greater orders for 300-series products.
Update: The story was updated to show developments on the fundamentals front.