European nickel premiums remained static over the past week, as many buyers are either on vacation or have their near-term needs covered. The market saw limited activity with most transactions being small-scale, and only briquette offers showing any potential for an increase.
Supply Constraints and Market Dynamics
Despite a recent decline in freight costs, the current premium levels and the incentives associated with London Metal Exchange (LME) warehouse deliveries are curbing the inflow of Asian cathodes into Europe. Traders noted that only a premium exceeding $500 per ton for uncut cathodes would justify importing Indonesian material, which, although high-quality, remains scarce.
Benchmark nickel prices on the LME rose by 2.3% over the past week to $16,930 per ton, driven by short covering and optimistic expectations for potential US interest rate cuts. However, weak physical demand continues to suppress the contract.
On-warrant nickel stocks in LME warehouses decreased by 1.4% to 109,482 tons, with Rotterdam inventories also showing a slight decline. Nickel spreads between nearby cash and three-month contracts remained in contango, shifting slightly to $226.89 per ton.
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