METALS-Nickel jumps on short covering amid Indonesian pricing plan

Credit: REUTERS/Yusuf Ahmad

Nov 29 (Reuters) - Nickel prices jumped on Wednesday as cautious investors and traders closed their short positions ahead of potential changes in pricing in top supplier Indonesia.

Three-month nickel on the London Metal Exchange CMNI3 rose 1.3% to $16,975 per metric ton by 0509 GMT, having hit its highest since Nov. 21 earlier in the session at $17,020.

The most-traded January nickel contract on the Shanghai Futures Exchange SNIcv1 climbed as much as 5.7%, the biggest daily gain since July 6, to 132,680 yuan per metric ton.

"It's a short covering rally and was triggered by a statement from the Indonesian minister about changing the pricing mechanism to a domestic benchmark from next year," said Sandeep Daga, a director at metals analysis company Metal Intelligence Centre.

"Incidentally, London court is set to rule today in a nickel case against the LME," Daga added.

London's High Court will rule later on Wednesday whether the LME unlawfully cancelled billions of dollars of nickel trades in March last year.

Prospects of change in pricing of the metal in Indonesia, which has mostly been based on the LME high-purity metal contract, have rattled some short positions holders into closing their positions, a trader said.

Nickel prices have been on a downward trend due to an oversupply concern. The metal is the worst performer across base metals on both SHFE and LME.

LME aluminium CMAL3 fell 0.1% to $2,214 a metric ton, lead CMPB3 rose 0.5% to $2,165, tin CMSN3 climbed 1.5% to $23,670, copper CMCU3 was almost flat at $8,475, and zinc CMZN3 was unchanged at $2,537.50.

SHFE copper SCFcv1 rose 0.5% to 68,120 yuan a metric ton, tin SSNcv1 advanced 0.8% to 196,580 yuan, aluminium SAFcv1 fell 1.3% to 18,580 yuan, zinc SZNcv1 declined 0.7% to 21,005 yuan, and lead SPBcv1 shed 0.3% to 16,095 yuan.

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(Reporting by Mai Nguyen in Hanoi; editing by Eileen Soreng)

((mai.nguyen@thomsonreuters.com; Reuters Messaging: mai.nguyen.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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