Nickel futures in Shanghai surged to the highest in almost three years on Thursday, tracking a rally in London prices the session before in what analysts said were misplaced concerns that the metal would also be hit by US sanctions.

LME nickel surged to a three-year high on Wednesday as the London Metal Exchange's previously announced move to delist two brands from Russia's Norilsk Nickel, or Nornickel, for delivery against its futures contracts took effect from April 18.

Nornickel is the world's second-largest nickel producer. “Unlike aluminium, which saw explicit sanctions against Rusal, there have been no explicit sanctions against nickel producers,” Commonwealth Bank of Australia analyst Vivek Dhar said in a note.

“However, markets are still concerned Norilsk Nickel, which is linked with both Rusal and sanctioned oligarch Oleg Deripaska, could eventually face sanctions.”

Nornickel accounts for about 9 per cent of global nickel supply. The most-traded nickel on the Shanghai Futures Exchange rose as much as 5.9 per cent to 109,790 yuan ($17,490) a tonne, its strongest level since June 2015. It was trading at 106,870 yuan by 0139 GMT, up 3 per cent.

Three-month LME nickel was up 0.5 per cent at $15,355 a tonne, after peaking at $15,875 on Wednesday, the highest since December 2014.

LME copper jumped more than 1 per cent to $2,572 a tonne in early Asian deals, its loftiest since August 2011, extending this month's rally spurred by worries over tighter supply following US sanctions on major Russian producer Rusal that began on April 6.

Aluminium and zinc prices in Shanghai also raced higher. Shanghai aluminium rose 2.3 per cent to 15,215 yuan per tonne and zinc climbed 2.6 per cent to 24,450 yuan. Aluminium prices in the United States have soared and are expected to diverge from those traded on the LME after the US Treasury Department imposed sanctions on Rusal.

The global nickel market deficit narrowed to 2,500 tonnes in February from a revised deficit of 15,800 tonnes in the previous month, the International Nickel Study Group said.

BHP Billiton Ltd cut its 2018 fiscal year iron ore output guidance, citing issues in its railroad car unloading system, after reporting an 8 percent rise in third-quarter iron ore production.

Asian stocks rose, led by resource shares as oil prices hit heights not seen since late 2014, though the potential boost to inflation globally also pressured fixed-income assets. The dollar was steady.

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