Nickel gains on China's home prices data, stocks rally

  • Benchmark LME nickel rose 1% to $13,125 a tonne and the most active nickel futures contract on ShFE closed up 1.1% to $15,251.43 a tonne
  • Benchmark LME copper rose 0.4% after a dull trading session in early Asian hours as investors eyed a set of Chinese data due to be released on Wednesday

Singapore: Nickel prices rose on Tuesday, as a faster rise in housing prices added to hopes that China's stimulus policies are translating into stronger growth.

Benchmark nickel rose 1% to $13,125 a tonne and the most active nickel futures contract on the Shanghai Futures Exchange (ShFE) closed up 1.1% to ¥102,270 ($15,251.43) a tonne.

The gains corresponded with a jump in Chinese shares, which hit a 13-month closing high after China data showed new home prices grew slightly faster in March after growth slowed the previous month, putting a floor under the cooling market.

"The macro environment... is becoming optimistic," said an analyst based in Guangzhou, who spoke on condition of anonymity due to company policy.

London copper also rose 0.4% after a dull trading session in early Asian hours as investors eyed a set of Chinese data due to be released on Wednesday, including the China's economic growth in the first quarter of 2019.

"China had this massive credit expansion for March and if the March data still shows a lack of growth or a very weak (economy) then people will start to question about the effective need of the credit expansion," said analyst Helen Lau of Argonaut Securities.

Fundamentals

Copper: Funds have this year played copper from the short side and from the long side but with little success either way, partly a reflection of copper's lack of directional impetus in recent weeks, said Reuters columnist Andy Home.

Zinc prices: London zinc dropped 1.2%, on track for a second straight fall, while the most-active zinc contract in Shanghai Futures Exchange (ShFE) fell 1.7%.

Zinc inventories: Zinc inventories in LME-approved warehouse as of Friday shot up 7.5% from a day earlier to near a three-week high of 56,125 tonnes, latest data showed.

On-warrant zinc stocks in warehouses tracked by ShFE also marked a 7-percent daily increase on Monday to 51,976 tonnes.

"Zinc came under pressure after inventories on the LME rose sharply. The 7.5% increase was the biggest gain in almost a year," ANZ said in a note.

Eramet: French mining company Eramet said its loss-making SLN nickel division had received a boost from the New Caledonia government, which authorised SLN to export 4 million tonnes of nickel ore annually for 10 years.

Rusal: Rusal, the world's largest aluminium producer outside China, is making its first investment in the United States since Washington lifted sanctions against the Russian aluminium giant, teaming up with US manufacturer Braidy Industries to build a mill in Kentucky.

Trade: United States Treasury Secretary Steve Mnuchin told Fox Business Network on Monday that trade negotiations between Washington and their Chinese counterparts were "making a lot of progress."

Investors will shift more attention towards the progress of the trade talks should the Chinese economic data disappoint, Argonaut's Lau said.


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