The most-traded January copper contract on the Shanghai Futures Exchange held 0.5 percent gains, at 47,490 yuan($7,759) a tonne on Thursday on expectations of a shortage of ore in China, as stainless steel makers run down their raw material stockpiles following an Indonesian ban on ore exports. Nickel's spectacular rally by May had all but deflated by October, but the basis for the rally is still alive, traders said. Indonesia's January ore export ban was aimed at developing its own processing industry to add value to its mineral wealth, a process that could take as long as two years.
Chinese producers are importing lower quality Philippine ore to supplement their stockpiles, but may still run short. "The chances of a supply gap are fairly high ... but I don't think it's going to be as acute as consensus price forecasts suggest," said analyst Joel Crane at Morgan Stanley in Melbourne, who sees nickel averaging $19,350 a tonne next year.
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