SHANGHAI, Aug 12 (SMM) – Nickel prices pulled back in morning trade, as longs took profits after sharp increases last week.
The most active October contract on the Shanghai Futures Exchange dived more than 5% to a low of 118,510 yuan/mt in the morning of Monday August 12, giving back the most of gains from late last week.
Its counterpart on the London Metal Exchange also dropped to a low of $15,020/mt, extending the retreat from a 16-month high of $16,690/mt hit on Thursday August 8.
While Indonesia’s unprocessed ore exports ban, the upcoming shutdown of the largest high-grade nickel ore supplier in the Philippines and stable stainless steel production will continue to support nickel longs, concerns about actual fundamentals keep traders cautious.
China is expected to see greater inflows of Indonesian nickel pig iron after a stainless steel mill there slashed production of 300-series.
Indonesian nickel will make its way to China in the form of ferronickel, if the government places a ban on raw ore exports. This will help fill shortfalls in China.
Fundamentals could barely facilitate the nickel rally. Nickel prices are expected to hover in a wide range at highs.
