SHFE nickel, aluminum futures drop, copper edges up on week

By the close of Friday's daytime trading session, the most-traded June nickel contract had fallen by 2.1% on week to Yuan 143,330/tonne ($21,072/t). In comparison, aluminium and copper futures contracts both for June delivery posted more modest changes. The most-traded aluminium contract slipped by 0.3% from a week earlier to Yuan 24,360/t, while the most-traded copper contract rose slightly by 0.2% on week to Yuan 104,710/t.

The marked decline in nickel futures was largely associated with easing concerns about potential supply disruptions in Indonesia, the world's largest nickel producing country, market analysts said.

Earlier in the week, Indonesia's Minister of Energy and Mineral Resources had announced that the government had delayed plans to lift mining royalties and impose new export taxes on minerals including nickel until an "ideal solution" could be found to balance the interests of the state and mining companies, as Mysteel Global had reported.

The announcement helped alleviate market concerns over rises in production and export costs of nickel in the country, which in turn weighed on sentiment in SHFE's nickel futures.

At the same time, changes in stocks of the three metals in SHFE-registered and bonded warehouses also varied during the week. As of May 15, nickel inventories had climbed by 11.4% from a week earlier to 79,889 tonnes, while aluminium stocks had increased by 3.3% to 508,876 tonnes. In contrast, those of copper had edged down by 0.4% on week to 180,643 tonnes.

Written by Iris Pang, pangjunyu@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com