Shanghai copper edged up 0.4 percent, while Shanghai nickel surged 3.3 percent on Tuesday after China trade data showed imports of the stainless steel material more than doubled in June, raising hopes that a highly anticipated supply shortfall may finally be beginning to bite. China's refined nickel imports surged by 244 percent on the year in June, to almost 40,000 tonnes, trade data showed.
"We would expect the lack of Indonesian ore imports to start to have an impact... although the timing has been difficult to pin down," said analyst Robin Bhar of Societe Generale in London. "Maybe at least the much hoped for tightening in supply is starting to begin." Banks and traders have bet that China will have to pick up the pace of refined nickel imports since Indonesia banned ore exports last year, to sate the appetite of its vast stainless steel industry.
But with little sign mills were starved of feed, several investment banks, including Macquarie have recently slashed their 2015 nickel price forecasts by 13 percent. "On the demand side, over the short term, there is a summer lull and the dollar is increasing so the market view is to short copper," said analyst Helen Lau of Argonaut Securities in Hong Kong. "But the reality is that in the second half, the overall situation in China is improving - we have already spotted some recovery in the housing market. So that's why we think we have reached the bottom for the price."
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