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 0.5% at $17,470 a metric ton by 1234 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 6.8% weekly gain, the largest since late 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.
U.S. President Joe Biden on Friday announced more than 500 new sanctions against Russia for its invasion of Ukraine two years ago. The new list has yet to be disclosed.
Russia is a major producer of refined nickel and aluminium.
LME aluminium, however, eased by 0.2% to $2,194.50 on Friday after EU and British sanctions lists made no mention of the metal.
Copper hits near 3-week peak on softer dollar
Copper lost 0.5% to $8,540 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, adding that the focus next week 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 0.4% to $2,397 a ton, lead lost 0.2% to $2,083.50 and tin was up 1.3% at $26,500.
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