By Chris Shaw<\/p>\n
It has been a good run for the nickel price over the past two months,
\nBarclays Capital notes the 3-month contract has gained almost 50% over
\nthis period and so far outperformed the 27% rise in copper and 13% gain
\nin aluminium over the same time frame.<\/p>\n
According to the group the magnitude of the gain has been somewhat of a
\nsurprise given the current oversupply of the metal on global markets,
\nthough this has been overshadowed in sentiment terms at least by higher
\nChinese refined nickel imports and stronger production levels in that
\nmarket.<\/p>\n
In addition, tthe group notes London Metal Exchange
\n(LME) inventories have fallen modestly of late, Standard
\nChartered estimates stocks fell by 4,900 tonnes in May to around
\n110,000 tonnes and have fallen further in the early part of this month.
\nDespite these declines, stocks remain relatively high at around
\n28 days of consumption.<\/p>\n
This could reduce further according to Barclays given production cuts
\nso far this year amount to about 21% of total output in 2008, meaning
\nany pick up in buying could see stockpiles come down more. This is not
\nguaranteed though in the group’s view, as while Chinese demand appears
\nto be improving as orders hit multi-month highs global demand remains
\nweak and is to date showing few signs of any sustained turnaround.<\/p>\n
Standard Chartered also points out there remains a lot of
\nproduction that could quickly come back on line and so meet any demand
\nincrease, the most likely being Chinese nickel pig iron producers. The
\nother point Barclays makes is some of the recent buying appears to have
\nbeen speculative in nature and so is likely to fade away at current
\nhigher price levels.<\/p>\n
In other words the group’s view is fundamentals don’t support the
\nrecent strength in nickel prices and won’t until demand improves, which
\nsuggests some sort of correction in coming months. Downside appears to
\nbe limited to something approaching US$10,000 per tonne in the group’s
\nview, though this still implies a fairly significant correction given
\nprices are currently around the US$14,000 per tonne mark.<\/p>\n
Standard Chartered agrees prices could begin to drift a bit in the
\ncoming quarter, though on its numbers the nickel price should still
\naverage something like US$14,000 per tonne in the September quarter and
\nUS$13,000 per tonne in the December quarter, which is equal to its
\nforecast for the current quarter<\/p>\n
National Australia Bank’s December quarter estimate is almost the same
\nbut the bank is a little more conservative between now and then,
\nforecasting average prices of US$12,725 per tonne for the three months
\nto the end of June and US$13,012 per tonne in the September quarter.<\/p>\n","protected":false},"excerpt":{"rendered":"
Having gained around 50% in the past two months, nickel prices are likely to see some sort of correction in coming months.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/55524"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=55524"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/55524\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=55524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=55524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=55524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}