BEIJING/MANILA: China’s stainless steel futures soared by their daily limit of 12% to a record high on Tuesday, as raw material nickel prices more than doubled on intensifying concerns over supply from Russia following its invasion of Ukraine.
The most-traded stainless steel contract on the Shanghai Futures Exchange, for April delivery, ended daytime trading locked at 22,125 yuan ($3,503.56) a tonne, notching a limit-up move.
The surge in stainless steel comes as nickel prices rallied almost 111% to a record $101,365 a tonne on the London Metal Exchange. The metal rose by the 15% daily limit to a record 228,810 yuan a tonne on the Shanghai exchange.
Russia supplies the world with about 10% of its nickel needs, mainly for use in stainless steel and electric vehicle batteries.
“The prospect of a ban on Russian commodity exports was felt far and wide,” ANZ commodity strategists said in a note. “Fears over Russian supplies left buyers exposed to a short-term squeeze.”
With market sentiment towards downstream consumption in China relatively optimistic, stainless steel prices could further rise, Huatai Futures analysts wrote in a note.
China’s Wuxi Stainless Steel Exchange Center halted trading for nickel products pending further notice and raised trading limits for both stainless steel products and nickel since settlement on March 7. Other steel products on the Shanghai bourse, however, retreated, with construction rebar for May delivery falling 1.2% to 4,956 yuan a tonne and hot-rolled coils down 2% to 5,220 yuan a tonne.
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