METALS-Low stocks, robust demand view drive Shanghai nickel to record high

    (Recasts, adds comments, updates prices)
    By Eileen Soreng
    Jan 12 (Reuters) - Nickel prices in Shanghai leapt to a
record high on Wednesday fuelled by declining inventories amid
expectations of strong demand growth from the electric vehicle
sector.
    The most actively traded February nickel contract on the
Shanghai Futures Exchange          rose 4.1% to 162,840 yuan
($25,584.87) a tonne by 0640 GMT. Prices earlier rose to a
record high of 163,200 yuan.
    Three-month nickel on the London Metal Exchange         was
up 0.7% at $21,945 a tonne, having hit the highest since
February 2012 earlier in the session.
    Nickel is in huge backwardation, a Singapore-based trader
said, adding that inventories are also running low due to
restocking by Chinese steel mills.
    Nickel stocks in LME warehouses were last at
99,744 tonnes, its lowest level since December 2019, while
refined nickel inventories in ShFE warehouses held
close to a record low of 4,455 tonnes hit in August 2021.
    LME cash nickel was at a premium of $192 a tonne over the
three-month contract , its highest since October 2019,
indicating tight nearby supplies.
    Analysts at Goldman Sachs projected the nickel market to be
in a 30,000 tonne deficit in 2022, up from their August forecast
of a 13,000 tonne deficit.
    With a much tighter starting point for the market this year
alongside strong EV trends ahead, the market is unlikely to see
an aggregate shift back into clear surplus, the brokerage said
in a note.

    FUNDAMENTALS
    * Sentiment in the industrial metals market was also buoyed
by a weaker dollar after U.S. Federal Reserve Chair Jerome
Powell said the central bank may take several months to make a
decision on running down its $9 trillion balance sheet.

    * LME copper         rose 1.2% to $9,835 a tonne, aluminium
        rose 0.5% to $2,984.5, lead         edged 0.4% higher to
$2,309.5 and zinc         was flat at $3,556. Tin
touched a record high of $41,435 a tonne and was last up 1.4% at
$41,000.
    * ShFE copper          was up 2.4% at 71,290 yuan a tonne,
aluminium          rose 1.2% to 21,645 yuan, zinc
climbed 3.2% to 24,915 yuan and lead          gained 0.8% to
15,330 yuan. Tin          rose 5.1% to 312,620 yuan a tonne,
having earlier hit a record high of 318,540 yuan.
    * China's copper output rose 6.71% in December from the
previous month to 802,200 tonnes, as producers stepped up
production to meet annual targets, state-backed research house
Antaike said.
    * For the top stories in metals and other news, click
          or

 ($1 = 6.3647 Chinese yuan)

 (Reporting by Eileen Soreng in Bengaluru; Editing by Uttaresh.V
and Shounak Dasgupta)



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