Feb 21 (Reuters) - London nickel prices rose on Monday to their highest in more than a decade, boosted by low inventories, while investors were cautious over the Ukraine tensions.
U.S. President Joe Biden and Russian President Vladimir Putin have agreed in principle to a summit over Ukraine, the French leader said, offering a possible path out of one of the most dangerous European crises in decades.
Three-month nickel on the London Metal Exchange was up 0.8% at $24,335 a tonne, as of 0715 GMT, after hitting $24,545 - its highest since August 2011.
The most-traded March nickel contract on the Shanghai Futures Exchange closed up 1.6% at 179,530 yuan ($28,359.53) a tonne, having earlier hit its highest in nearly a month.
"Strong sales in electric vehicles are favouring demand for battery materials, including nickel," analysts at ANZ said in a note, adding the ongoing Ukraine-Russia tension and consequent supply risk are adding to spread volatility.
The premium for cash nickel over the three-month contract rose to $465 a tonne on Friday, suggesting tightness in nearby supplies. Nickel stocks in LME-registered warehouses have fallen about 69% since April last year to 83,328 tonnes.
FUNDAMENTALS
* LME copper edged up 0.2% to $9,973 a tonne, aluminium eased 0.1% to $3,259.5, lead fell 1.1% to $2,322.5, zinc inched 0.1% higher to $3,579 and tin fell 0.3% to $44,000.
* ShFE copper eased 0.1% to 71,460 yuan a tonne, aluminium fell 0.6% to 22,595 yuan, zinc shed 1.2% to 24,845 yuan, lead was down 0.7% at 15,385 yuan and tin rose 0.4% to 338,500 yuan.
* Data last week showed copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 27.9% to 136,300 tonnes from the previous week.
* Indonesia's PT Smelting, a joint venture between Mitsubishi Materials Corp and Freeport Indonesia, on Saturday launched construction of a 3.2 trillion rupiah ($223 million) expansion of its East Java copper smelting facility.
* U.S. Federal Reserve officials on Friday squelched what had been rising market expectations for an aggressive initial response to 40-year high inflation, signalling that steady interest rate hikes should be enough to do the trick.
* The state planner in China, the biggest metals consumer, said on Friday it will take steps to stabilise the commodity market and hasten construction of new infrastructure, in the effort to promote steady industrial growth.
($1 = 6.3305 yuan)
Reporting by Eileen Soreng in Bengaluru; Editing by Devika Syamnath and Subhranshu Sahu
Source: Reuters