Nickel led gains in Shanghai metals futures, hitting a one-month high on Friday, October 13, on bets China’s Communist Party congress next week will result in stronger demand for imports.
The potential by China to accelerate or broaden moves to eliminate environmentally inefficient mines and metal plants to better meet international industrial standards following the meeting is seen as a potential boost for imports.
China, the most important trading partner of more than 130 countries, is the world’s biggest greenhouse gas emitter.
“Nickel once again led the sector higher, as an ongoing curb on Chinese output continues to support prices,” ANZ said in a note. “However demand also remains strong, particularly from the alloys industries.”
A weakened U.S. dollar and growing arbitrage opportunities, particularly in copper, were also fuelling gains, according to commodities traders, as premiums for copper held in China bonded zones have climbed by $9 this week to $74, the highest in more than two months.
Copper was also underpinned by Chinese data showing monthly imports rose by 50,000 tonnes in September to 430,000 tonnes, the highest since March.
Three-month nickel on the London Metal Exchange climbed 0.8 percent to a one-month high of $11,487.50 a tonne by 0700 GMT, extending a 2.3-percent rise from the previous session.
The most-traded nickel contract on the Shanghai Futures Exchange closed 3.27 percent higher at 92,290 yuan ($14,024.56) a tonne, the highest since Sept. 13.
Many metals market participants are awaiting the outcome of China’s Communist Party congress next week, Capital Economics analyst Caroline Bain said, for an indication of broader policy initiatives and their implications for metals demand.
Three-month LME copper was little changed $6,878 a tonne, after hitting an intraday one-month peak of $6,903 overnight. ShFE copper climbed just under 1 percent.