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| LME Nickel Price Rises To Level Of US$13,000 / Ton After Interval Of 4 Months |
| = Following Rise Of Copper Price, Major Nickel Producers Are Calmly Watching Hedge Sales |
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LME nickel price for three-month futures at the 7th of May rose to a level of US$13,000 per ton after an interval of 4 months and recorded US$13,150 per ton as a high price since January of this year. This sharp rise of LME nickel price followed a firm tone of copper price as continued from March and a decrease of LME copper stocks, both of which are the factors to stimulate nickel price. LME nickel stocks as of the 6th of May came to 112,068 tons, having had a considerable decrease of 2,406 tons from that at the end of April, and this steep decrease of nickel stocks arose just for one week. It is wondered whether this aspect means a change of the combination on supply and demand of nickel or not. However, some of the parties concerned have a view that, apart from LME nickel stocks, it is potential to exist 100,000 tons of nickel held by nickel producers and traders. A leading analyst has assumed that the total quantity of nickel stocked in the world at present is estimated to be 300,000 tons. Namely, on the heavy load of nickel stocks as assumed to be on a scale of 200,000 - 300,000 tons, it is marked to see how extent does nickel price recover on a basic tone, but the parties concerned have an opinion that a rise of LME nickel price at present is thought to have been caused by the stoppage of hedge sales as performed by major nickel producers and many traders in order to watch carefully about further movements of LME nickel price. This action is said to have connected with a decrease of LME nickel stocks. On the other hand, major nickel producers in the western world have been endeavoring to reduce their nickel production (a scale of the reduction is estimated to be 300,000 tons on an annualized base, corresponding to a cutback of 20% from the output in 2008) but there is a strong view in the market that this reduction of nickel production will be not enough to improve an oversupply of nickel. Also, as regards Norilsk Nickel of Russia which is the largest producer of nickel in the world, it was so far not informed that Norilsk Nickel reduced their nickel production in January - March quarter of 2009. This matter is a delicate point and, when a crisis of the Russian economy is considered, a reduction of nickel production will certainly cause to decrease the revenues in Russia. Therefore, Norilsk Nickel is supposed to determine their cutback of nickel production only when the final stage comes up. The activities surrounding nickel as seen in China from the beginning of 2009 are probably due to a decrease in production of nickel-contained pig iron (including low grade ferro-nickel), which China produced on a scale of 70,000 - 80,000 tons per annum of nickel on content base from 2007. This reduction in production of nickel-contained pig iron has trended from the beginning of 2009 to increase more its severity and a leading analyst has assumed that China is anticipated to decrease their production of nickel-contained pig iron in 2009 to a scale of 25,000 tons of nickel on content base. The current market price of US$5 - 6 per lb. of Ni for nickel-contained pig iron is still not payable for most of Chinese producers and the cost to produce nickel-contained pig iron in China is estimated at US$7.00 per lb. of Ni as its standard level. The world production of crude stainless steel in 2009 is anticipated to come down to a scale of 20.8 million tons (to decrease by 20% from that in 2008) and, under this situation, nickel price has still suffered from a lack of factors to be buoyant, while LME copper price has risen by positive purchases from China. |
| last modified : Thu 14 May, 2009 [10:34] |
