BEIJING- Shanghai nickel rallied about 5 percent on Monday to its highest level in nearly four months, driven by rising ore prices and tightened supply from top producer Indonesia amid strong seasonal demand.
The most-traded October nickel contract on the Shanghai Futures Exchange jumped as much as 4.8 percent to its highest since May 9 and was at 170,340 yuan ($23,423.13) per metric ton.
Indonesia, which is the top exporter of nickel products to China, recently delayed issuing mining quotas, resulting in elevated prices and tightened supply of nickel ore.
Planned strong stainless steel production for September, the main nickel-using sector, and a recent rally in the most-traded stainless steel contract also bolstered sentiment.
Meanwhile, a firm dollar weighed on the market. A stronger greenback makes dollar-denominated metals less affordable for buyers holding other currencies.
Three-month nickel on the London Metal Exchange lost 1.1 percent to $20,850 per metric ton.
Investors are now awaiting key US services and Chinese trade and inflation data due out later in the week for further direction.
LME aluminum fell 1 percent to $2,214 a ton, tin slid 0.5 percent to $25,670, zinc lost 0.7 percent to $2,467.50, lead slipped 1.1 percent to $2,225 and copper shed 0.2 percent to $8,480.
SHFE aluminum was down 0.7 percent to 19,070 yuan a ton, while zinc gained 0.4 percent to 21,160 yuan, lead climbed 0.1 percent to 16,735 yuan, tin moved 0.2 percent up to 216,150 yuan, and copper was up 0.1 percent at 69,560 yuan. -Reuters
