Nickel prices to hover at high levels

SHANGHAI, Jun 29 (SMM) - Market panic over inflation eased last week amid the dovish statement by Fed Chairman Powell. Investors responded positively to the strong fundamentals of the nickel market.

The backwardation structure on SHFE nickel expanded as bulled increased their positions amid low domestic inventories and SHFE warrants; LME nickel returned to a backwardation structure on the back of expectations over higher export tariffs in Russia, bolstering SHFE nickel prices.

High positions of the SHFE 07 nickel contract became a new focus. Taking into account the limit on positions on the SHFE, positions on the near-month contract will continue to decline sharply this week. The period of tight supply is over. If the nickel export taxation in Russia is implemented in the future, the stance to deal with inflation of foreign countries is consistent with China. The rise in nickel prices is likely to slow down, and nickel prices should fluctuate at high levels this week.