LONDON: Nickel and copper rose on Monday, boosted by expectations for strong demand from the electric vehicle sector, a pollution crackdown in China and a strong global macro-economic backdrop.
Participants at the LME Week industry gathering in London last week were bullish over the sector’s prospects, especially the coming electric vehicle revolution which should see sales of the new nickel and copper intensive cars soar in years to come.
“Markets like a good story whether its electric vehicles, China’s one belt one road (initiative) or even India (growth) but we’re going to struggle to make new ground from here,” said Societe Generale analyst Robin Bhar.
“A stronger dollar may provide headwind through to the end of year, but we should stay well supported at these levels.”
NICKEL: London Metal Exchange nickel prices were up 1.2 percent at $12,875 a tonne by 1135 GMT, having gained nearly 10 percent last week to hit a high above $13,000, its best level since June 2015.
NICKEL FORECASTS: Goldman Sachs upgraded its nickel forecasts, pushing its 3-month nickel view to $12,500 a tonne from $9,000, but said prices were more likely to find nearby support from China’s pollution crackdown given electric vehicle demand is a story for 2020 onwards.
“We expect nickel prices to remain high over the next couple of months on a supportive macro-economic backdrop and market tightening driven by Chinese nickel pig iron (NPI) cuts,” it said in a report. NPI is a low-grade composite of nickel.
STEEL: Chinese iron ore futures surged more than 6 percent, tracking firmer steel prices after China’s top steel producing province surpassed its capacity reduction targets for the year as Beijing’s pollution crackdown heats up.
LME COPPER: London copper rose 0.8 percent to $6,949.50 a tonne, paring losses from the previous session. Copper prices have climbed 7 percent this quarter and are eyeing a sixth straight quarter of growth.
COPPER PRODUCTION: Copper production in Democratic Republic of Congo, Africa’s top producer of the metal, was up by 9.3 percent this year through September over the same period last year at 831,000 tonnes.
DOLLAR: The dollar drifted from the top of its recent range, relieving some headwinds for metals after climbing on bets that the Federal Reserve will raise interest rates again next month and tighten further into 2018.
ALUMINIUM: China’s Ministry of Commerce has asked the World Trade Organization (WTO) for consultations on a recent US move to impose antidumping duties on imports of Chinese aluminium foil.
Source: Brecorder.com
