METALS-Nickel hits its highest since 2011 as stockpiles dwindle

    (Updates prices)
    LONDON, Jan 14 (Reuters) - Nickel prices surged to their
highest since 2011 on Friday as a supply deficit ate into
stockpiles and investors looked ahead to rising demand from
electric vehicles.
    Benchmark nickel         on the London Metal Exchange (LME)
was up 0.1% at $22,205 a tonne at 1718 GMT having earlier
reached $22,935. It is up about 7% this week.
    Prices have doubled since March 2020 but are well short of a
record high of $51,800 reached in 2007.
    Nickel is mostly used to make stainless steel. Batteries
account for 5% of demand, but that could rise to 30% by 2040,
said WisdomTree analyst Nitesh Shah.
    "There is a broad realisation of just how important nickel
is in the energy transition. It's very, very difficult to see
how supply of class 1 nickel (used for batteries) can keep up
with demand," he said.
    "We're very bullish. $25,000 is not where it's going to
stop. We can go much higher than that over the next decade."

    INVENTORIES: On-warrant nickel inventories in LME-registered
warehouses have fallen to 44,832 tonnes, the lowest since 2019
and down from more than 200,000 tonnes in April. Stocks in Shanghai Futures Exchange (ShFE) warehouses are
close to record lows at 4,711 tonnes. One London trader said
that Chinese buyers were "hoovering up" LME metal. SPREAD: In a sign that supply is tightening, the premium for
cash nickel over the three-month contract jumped to $318 per
tonne, by far its highest since 2009. SUPPLY: The International Nickel Study Group (INSG) last
year predicted a surplus in 2022 after a deficit in 2021. That
increase in supply is likely to sap momentum from nickel
    INDONESIA: Top producer Indonesia is considering an export
tax on some nickel products, Bloomberg reported this week.

    ALUMINIUM: France's main aluminium smelter, Aluminium
Dunkerque, said it does not plan further changes to production
after cutting output by 15% due to high power prices.

    PRICES: LME copper         was down 2.2% at $9,735 a tonne,
erasing most of this week's gains. Aluminium         was 0.9%
higher at $2,979, zinc         fell 1.1% to $3,523, lead
slipped 0.1% to $2,356 and tin         was down 0.3% at $40,390.

 (Reporting by Peter Hobson; additional reporting by Eileen
Soreng in Bengaluru;
Editing by David Goodman, Kirsten Donovan)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

Search News

Filter Results

Publication Date

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.