Comments
Nickel jumped as much as 6 per cent in Shanghai on Wednesday, leading a rebound in Chinese base metals as they tracked the rally overnight in London after a sell-off that pulled prices to multi-year lows.
Investors covered short positions in China even as London prices took a pause after Tuesday’s rally.
“People were so bearish about the market they kept on selling. But once they saw London prices recover, we also saw an increase in Shanghai,’’ said Peter Peng, analyst at CRU Group in Beijing.
Shanghai Futures Exchange
The most-traded nickel for January delivery on the Shanghai Futures Exchange was up 5.3 per cent at 67,780 yuan a tonne by 0303 GMT, after climbing by its 6 per cent upside limit for the day.
Three-month nickel on the London Metal Exchange jumped 5.7 per cent on Tuesday after hitting its lowest in over a decade at $8,145 a tonne. It was trading at $8,760 on Wednesday, down 0.2 per cent.
Peng said he remains bearish on nickel prices for the remainder of the year with no marked improvement in Chinese demand for the raw material used in making stainless steel.
“It’s better than the third quarter, but still weak, still not enough,’’ he said.
Other Shanghai metals also rebounded. January copper rose almost 3 per cent to 34,550 yuan a tonne and zinc climbed 3 per cent to 12,880 yuan per tonne.
LME copper
On LME, three-month copper was off 0.3 per cent at $4,592.50 a tonne after jumping 2.6 per cent overnight, recovering from Monday’s trough of $4,443.50.
That was the lowest price for LME copper since May 2009 as investors sold off base metals earlier this week amid a stronger dollar and fears that the Chinese economy could stumble further.
The top consumer of many commodities from copper to iron ore, China is headed for its slowest economic growth in 25 years, curbing demand for industrial raw materials and dragging prices deeper into the red despite output cuts by some producers.
Production cuts announced by Chinese zinc smelters last week will do little to tighten next year’s global supply-demand balance in refined metal because already-known mining cutbacks would have forced smelters to reduce production anyway.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.