Metals-Nickel rises on concerns over supply via Hormuz
XLB•Nickel climbs on Hormuz supply concerns
Nickel rose nearly 2% on Thursday as concern over disruptions to traffic through the Strait of Hormuz raised fears of sulphur supply shortages, threatening a key raw material for production.
Benchmark three-month nickel CMNI3 on the London Metal Exchange climbed 1.83% to $17,110 a metric ton by 0300 GMT. The most-traded nickel contract on the Shanghai Futures Exchange SNIcv1 was up 2.01% at 131,640 yuan ($19,455.53) a ton.
"Sulphur supply tightness expectations are fermenting again. For nickel, this mostly means an upward shift in cost expectations for high-pressure acid leaching process," analysts from Chinese broker Jinrui Futures said in a note, referring to a process used to extract nickel from ore.
Indonesia, the world's biggest nickel producer, relies on the Middle East for about 75% of the sulphur used in sulphuric acid for leaching metal from ore.
U.S. and Iranian blockades of the Strait of Hormuz and military operations have disrupted shipments through the vital shipping corridor.
Copper steadier on weaker U.S. inflation data
Copper was steadier, helped by weaker U.S. inflation data and hopes of a more dovish Federal Reserve stance. It was also supported by supply worries and withdrawals from LME warehouses.
The metal rose 0.17% in London CMCU3 and dipped 0.28% in Shanghai SCFcv1.
U.S. producer prices posted their biggest decline in 14 months in June, data released on Wednesday showed, adding to a string of U.S. reports that have cooled expectations for Federal Reserve interest rate hikes.
Lower borrowing costs can support metals demand because they tend to help economic activity.
Among other LME metals, aluminium CMAL3 rose 0.43%, zinc CMZN3 gained 0.58%, lead CMPB3 added 0.35% and tin CMSN3 dipped 0.15%.
