Benchmark nickel

on the London Metal Exchange (LME) was up 0.5% to $14,375 per tonne at 1053 GMT after declining 3% in the previous session, but remained near a one-year high.

"We are not confident that this level can be sustained because the second half is going to represent changing conditions in Chinese stainless steel demand and therefore destocking," said Macquarie analyst Vivienne Lloyd.

Speculators and physical buyers have pushed prices on the LME up 25% within two weeks.

Reuters reported Chinese firm Tsingshan Holding Group has been buying large quantities of nickel on the LME to supplement its own output.

STAINLESS DEMAND: Nearly 70% of global nickel consumption, estimated at 2.4 million tonnes this year, is accounted for by stainless steel mills, a majority of which are in China.

NICKEL STOCKS: Headline nickel inventories in LME-approved warehouses are at their lowest since January 2013 at 100,422 tonnes.

A single entity holds between 50% and 79% of LME nickel warrants, exacerbating fears over short supplies. <0#LME-WHL>

TRADE TENSIONS: China strongly opposes US sanctions on a Chinese energy firm accused of violating curbs on Iran's oil sector imposed over Tehran's nuclear programme, its foreign ministry said.

The potential standoff over the sanctions could escalate long-standing tensions between the world's two largest economies and further sap demand for metals.

CHINA GROWTH: China's industry ministry said "arduous efforts" will be needed to achieve this year's industrial output growth target, as trade protectionism weighs on exports and clouds the outlook for the world's second-largest economy.

COPPER OUTPUT: For the first four months of the year, the global copper market was in a 155,000 tonnes deficit compared with a 64,000 tonnes deficit in the same period a year earlier, the International Copper Study Group said.

US RARE EARTHS: US President Donald Trump on Monday told the Pentagon to find better ways to procure a rare earth magnet used in speciality motors, warning the nation's defence would suffer without adequate stockpiles.