Nickel prices surge amid lingering supply concerns

SHANGHAI, Jun 13 (SMM) – Despite weak fundamentals, Shanghai nickel prices extended its increase from the previous day as concerns about delayed shipments of nickel ore on Indonesia floods encouraged longs to load up their positions. 

The SHFE July contact jumped to 99,860 yuan/mt, from 98,400 yuan/mt some 30 minutes ahead of the closing on Thursday June 13, with an intraday high of 100,120 yuan/mt. It finished the trading day 2.13% higher at 99,950 yuan/mt. 

The backwardation in SHFE nickel contracts intensified as the spread between July and September contracts exceeded 1,300 yuan/mt at closing, from 1,200-1,300 yuan/mt in early trades on June 13. 

Higher futures prices also prompted spot sellers of nickel to keep premiums firm, even as the actual trades were limited, SMM learned. 

Nickel inventories across SHFE-approved warehouses expanded 4,935 mt on June 13, and this grew uncertainties around prices. An open import arbitrage window is likely to accelerate an influx of cargoes from the bonded stocks to the domestic market this week.