November 6, 2017 / 4:29 AM / 2 years ago

METALS-London copper, nickel buoyed on EV demand expectations

 (Adds Germany industrial orders numbers, updates prices)
    By Melanie Burton
    MELBOURNE, Nov 6 (Reuters) - London nickel and copper
extended gains on Monday, supported by upbeat sentiment over
potential demand from electric vehicles in the wake of last
week's cheery London industry week. 
    Goldman Sachs upgraded its nickel forecasts, but said prices
were more likely to find nearby support from China's pollution
crackdown given EV demand is set as a story for 2020 on.
    "We expect nickel prices to remain high over the next couple
of months, on a supportive macroeconomic backdrop and market
tightening driven by Chinese nickel pig iron (NPI) cuts in
Shandong province during the winter heating season," it said a
report. NPI is a low-grade composite of nickel.
    "Even though the EV wave poses significant upside risk to
nickel demand, we think much of the growth is likely to take
place after 2020 and the current stock level will be sufficient
to cover the demand before then."
    Goldman upgraded its 3-month nickel view to $12,500 a tonne
from $9,000, its 6-month view to $12,000 a tonne from $9,000 and
its 12-month view to $11,000 from $9,000 a tonne. 
    
    FUNDAMENTALS
    * NICKEL: London Metal Exchange nickel prices were
up 1.3 percent at $12,890 by 0707 GMT and not far off two-year
highs struck last week above $13,000 a tonne. Shanghai nickel
 earlier hit its highest in a year, up 2.5 percent.
    * LME COPPER: London copper rose 0.9 percent to
$6,955 a tonne, paring losses from the previous session. Copper
prices have climbed 7 percent this quarter and are eyeing a
sixth straight quarter of growth. 
    * SHFE COPPER: Shanghai Futures Exchange copper
climbed 0.4 percent to 54,670 yuan ($8,234) a tonne.
    * GERMAN ECONOMY: German industrial orders rose unexpectedly
in September, driven by strong demand for machines, cars and
other capital goods, data showed on Monday, suggesting Europe's
biggest economy ended the third quarter on a solid footing.

    * USD: The dollar drifted from the top of its recent range,
relieving some headwinds for metals after climbing on bets that
the Federal Reserve will raise interest rates again next month
and tighten further into 2018.
    * COPPER INVESTORS: Hedge funds and money managers reduced
their net long position in COMEX copper contracts in the latest
week.
    * LME: The launch of new base metals trading platform NFEx
could be pushed back from the first quarter of 2018 as potential
users are still busy getting their systems ready for new
European Union rules.
    * ZINC: Officials in China's Xiamen seized over 1,400 tonnes
of imported zinc waste recently, after launching a campaign
against foreign waste harmful to the environment in March.


     * COMING UP: Euro Zone Mkt Serv Final PMI Oct at 0900 GMT
    
 BASE METALS PRICES                      0706 GMT         
 Three month LME copper                               6956
 Most active ShFE copper                             54650
 Three month LME aluminium                            2180
 Most active ShFE aluminium                          16160
 Three month LME zinc                               3242.5
 Most active ShFE zinc                               25995
 Three month LME lead                                 2477
 Most active ShFE lead                               18785
 Three month LME nickel                              12890
 Most active ShFE nickel                            103230
 Three month LME tin                                 19535
 Most active ShFE tin                               144200
                                                          
 BASE METALS ARBITRAGE                                    
 LME/SHFE COPPER                    LMESHFCUc3      781.65
 LME/SHFE ALUMINIUM                 LMESHFALc3     -683.51
 LME/SHFE ZINC                      LMESHFZNc3      589.08
 LME/SHFE LEAD                      LMESHFPBc3     -1027.9
                                                         4
 LME/SHFE NICKEL                    LMESHFNIc3     1874.96
 ($1 = 6.6395 Chinese yuan)

    
 (Reporting by Melanie Burton; Editing by Richard Pullin and
Sunil Nair)
  
 
 
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