LONDON: Nickel prices were heading for their biggest weekly gain in seven months on Friday as expansion of Western sanctions against Russia triggered covering of bets on lower prices of the metal.
Three-month nickel on the London Metal Exchange was up 0.3% at $17,445 a metric ton at 1521 GMT after touching its highest since Nov. 10 at $17,600.
The metal used in stainless steel and electric vehicle batteries is on course for a 6.7% weekly gain, its largest since July. “It’s all about the sanctions risks. Everyone was incredibly short on nickel, so potential risk to supply (from Russia) caused this reaction,” said Dan Smith at Amalgamated Metal Trading.
As Russia, a major producer of refined nickel and aluminium, is approaching the two-year mark of its invasion of Ukraine on Feb. 24, the US, EU and Britain expanded sanctions lists against Moscow. They made no mention of the two metals.
LME aluminium hit a one-month low of $2,213 after the US released its list and was last down by 0.7% to $2,182. Copper lost 0.6% to $8,534 after touching $8,608.50 in the previous session for its highest since Jan. 31.
The metal used widely in construction has risen by almost 5% since Feb. 9. “China’s latest data is mildly bullish - as indicated by new home prices - and a lot of banking and property stocks are picking up,” Smith said. The immediate demand uplift the market hoped for from top metals consumer China after the Lunar New Year holiday has failed to materialise, said Marex strategist Al Munro.
Munro said next week’s focus will be on PMI data that could show a substantial slowdown in activity due to an earlier and longer holiday than usual.
Nickel, meanwhile, was also supported by speculation over slow Indonesian mining quota approval, which could tighten ore supply, CITIC Futures said. Indonesia, the world’s biggest nickel producer, is reviewing applications for mining quota approval for the next three years.
Other minerals are facing the same issue, with the country’s refined tin exports having fallen by 99% in January. LME zinc rose 0.1% to $2,388 a ton, lead lost 0.1% to $2,086 and tin was up 1.0% at $26,420.
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