METALS-Shanghai nickel hits 3-week high amid supply concerns

Credit: REUTERS/JUAN CARLOS ULATE

Recasts, updates prices as of 0743 GMT

BEIJING, Feb 22 (Reuters) - Shanghai nickel prices jumped more than 3% on Thursday to a three-week high, as potential U.S. sanctions on Russia stoked supply concerns.

The most-traded March nickel contract on the Shanghai Futures Exchange SNIcv1 closed day-time trade 3.2% higher at 131,320 yuan ($18,265.27) a metric ton, hitting its highest level since Jan. 29.

Three-month nickel on the London Metal Exchange CMNI3 climbed 0.4% to $16,990 per ton by 0743 GMT, having jumped 3.6% in the previous session and posting the biggest daily gain since last November.

U.S. President Joe Biden said Washington plans to unveil a major sanctions package against Moscow on Friday. That triggered speculation on the metals Russia exports, which are a major source of revenue for the country.

Russia is a main producer of nickel and aluminium.

Also weighing on supply was the issuance of mining permit in Indonesia, the world's top producer of nickel, said analysts at Guotou Anxin Futures.

Nickel is mainly used to make stainless steel and new energy battery.

Meanwhile, market risk appetite was boosted by China making its biggest ever reduction in the benchmark mortgage rate earlier this week.

Elsewhere, LME aluminium CMAL3 climbed 0.6% to $2,232.50, copper CMUC3 was up 0.6% at $8,591, zinc CMZN3 rose 0.8% to $2,412.50, lead CMPB3 gained 0.3% to $2,083 and tin CMSN3 rose 0.4% to $26,395.

The dollar edged broadly lower as traders awaited a slew of business activity surveys to gauge the health of major economies and what that may mean for the global interest rate outlook.

A weaker dollar supports metal prices as it makes it cheaper to buy the greenback-priced commodity.

SHFE aluminium SAFcv1 slipped 0.5% to 18,810 yuan a ton, copper SCFcv1 was up 0.5% at 69,160 yuan, tin SSNcv1 dipped 0.2% to 217,920 yuan, zinc SZNcv1 gained 0.4% to 20,430 yuan, and lead SPBcv1 ticked 0.3% higher to 15,865 yuan.

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($1 = 7.1896 Chinese yuan)

(Reporting by Siyi Liu and Andrew Hayley; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)

((Siyi.Liu@thomsonreuters.com;))

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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