BEIJING: Shanghai nickel prices gained the most in more than two months on Tuesday after an industry report raised the prospect of a change in the way top supplier Indonesia prices the metal.
The most-traded December nickel contract on the Shanghai Futures Exchange rose by as much as 3.8% during day-time trade, the biggest gain since Sep. 4. It closed 3.2% higher at 129,330 yuan ($18,080.53) per metric ton.
Three-month nickel on the London Metal Exchange rose by 3.6% in earlier trading and was 2% higher at $16,395 per ton by 0918 GMT.
“Indonesia must establish specific nickel prices to reflect the market,” a report published by price rating agency Shanghai Metals Market (SMM) said.
Indonesia traditionally prices its nickel against the LME nickel contract. But a government official said in May it planned to establish a new nickel price index this year.
LME nickel only includes Class 1 nickel, and can no longer reflect the expanding supply of Class 2 nickel produced by Indonesia, SMM said in the report posted on its official Wechat account.
It added the topic of a new pricing mechanism was discussed at an SMM conference on the Indonesian island of Bali on Tuesday.
SMM and the Indonesian Nickel Miners Association signed a memorandum of understanding to create an Indonesian nickel price index, SMM said in a separate post, but did not provide details of any concrete plans.
The Indonesian association did not immediately respond to a request for comment.
“Government encourages private sector to issue this price index. The more, the better,” Septian Hario Seto, deputy minister at Indonesian coordinating ministry of maritime affairs, told Reuters.
LME pricing for refined nickel metal does not appropriately reflect the supply and demand situation for nickel ore in Indonesia, two China-based analysts said.
Prices of the refined metal used in stainless steel and battery making have slumped this year in response to expectations of a growing market surplus.
Comments
Comments are closed.