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Three-month delivery nickel on the London Metal Exchange rose 0.9% to $ 20,915 per share. tonnes, from 0305 GMT, a jump of more than 15% since last January.
“Nickel prices are expected to remain strong in the short term amid low inventories and expectations of inventory reductions, but increased capacity from Indonesia will slow further growth in the medium to long term,” analysts with Jinrui Futures wrote in a note.
With stainless steel producers increasing maintenance in the first quarter, demand for nickel may weaken from the previous quarter, according to analysts.
Stocks of refined nickel in ShFE stocks were last at 4,859 tonnes, close to a record low level of 4,455 tonnes hit in August 2021.
S&P Global Market Intelligence forecasts Global primary nickel consumption is increasing year-on-year due to capacity expansions in stainless steel in China and Indonesia.
“Demand outside China is expected to be the main driver of global volume growth by 2022, and global consumption is expected to increase at a compound annual growth rate of around 7% between 2020 and 2025,” S&P said.
“Battery sector nickel demand is also expected to accelerate significantly, with many predicting it to nearly 35% of total demand by the end of the decade.”
(With files from Reuters)