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Low inventories and robust demand view push Shanghai nickel to record high

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Nickel prices in Shanghai have jumped to a

Wednesday’s record fueled by falling stocks in the middle

expectations of strong growth in demand for electric vehicles

sector.

The most actively traded February nickel contract on the

Shanghai futures exchange closed day trading at 3.8%

higher at 162,340 yuan ($ 25,509.51) per ton. Prices rose earlier

to a record high of 163,200 yuan.

The three-month nickel on the London Metal Exchange was

Up 1.2% to $ 22,050 a tonne by 08:20 GMT, after hitting a high

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since February 2012 earlier in the session.

Nickel is in huge deport, a trader based in Singapore

said, adding that stocks are also low due to

replenishment by Chinese steel mills.

Nickel stocks in LME warehouses were the last to

99,744 tonnes, its lowest level since December 2019, while

stocks of refined nickel in ShFE warehouses tenuous

near a record low of 4,455 tonnes reached in August 2021.

LME spot nickel was at a premium of $ 192 per tonne over the

three month contract , its highest since October 2019,

indicating tight supplies nearby.

Goldman Sachs analysts predicted the nickel market would

in a deficit of 30,000 tonnes in 2022, up from their August forecast

from a deficit of 13,000 tonnes.

With a much tighter starting point for the market this year

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alongside strong trends in future EVs, the market is unlikely to

overall return to clear surplus, brokerage said

in a note.

FUNDAMENTALS

* Sentiment on the industrial metals market also strengthened

by a weaker dollar after US Federal Reserve Chairman Jerome

Powell said the central bank could take several months to make a

decision to reduce its balance sheet by $ 9 trillion.

* LME copper gained 1.5% to $ 9,862 per tonne,

aluminum rose 0.1% to $ 2,973.5, lead soared

1.1% at $ 2,325.5 and zinc was flat at $ 3,557.5. Tin

reached a record high of $ 41,435 per tonne and was the last

2.1% to $ 41,300.

* ShFE copper increased 2.3% to 71,170 yuan per ton,

aluminum rose 1% to 21,605 yuan, zinc soared

3% to 24,885 yuan and lead gained 0.7% to 15,310 yuan.

Tin rose 4.4% to 310,520 yuan per ton, after

reached a record high of 318,540 yuan.

* China’s copper production increased 6.71% in December compared to the

the previous month to 802,200 tonnes, as producers stepped up

production to achieve annual targets, state-supported research house

Antaike said.

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Where

($ 1 = 6.3639 yuan)

(Reporting by Eileen Soreng in Bengaluru; Editing by Uttaresh.V

and Shounak Dasgupta)