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| Average Prices Of LME Nickel In July 2009 Had A Further Rise |
| = Being Stimulated By Strike At Sudbury / Canada. LME Nickel Prices Recovered To Level Of US$7 / Lb. |
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The average prices of LME nickel in July of 2009 were known as <> US$15,984.57 per ton (US$7.25 per lb.) for cash and <> US$16,055.00 per ton (US$7.28 per lb.) for three-month futures, having risen by approximately US$1,000 per ton from the average price recorded in June and returned to the price level prevailed in August to September of 2008. Reflecting the strike taken place by the Union at Sudbury Division of Vale Inco in Canada since the 13th of July, LME nickel prices have been fevered from last week and had once risen to a higher level than US$17,000 per ton in July. Many of the analysts concerned have an opinion that, if Union once goes on a strike, it will continue for 2 - 3 months as seen previously. By taking a chance on this factor to stimulate nickel price, floating money from funds is flowing into the nickel market and, therefore, high nickel prices are supposed to continue for the time being. There is a view in the market that, under this situation, nickel prices may rise to a level of US$19,000 per ton, and, apart from the realities on supply and demand of nickel, nickel prices will fluctuate. The reason is that nickel situation in 2009 is estimated to be still an oversupply of more than 80,000 tons on an annualized base. In addition, LME nickel stocks are anticipated to be difficult to decrease to a lower level than 100,000 tons and, accordingly, the parties concerned have thought to have a potentiality to be essential to rectify nickel price in autumn of this year. When LME nickel prices rise to a level of US$7 per lb., many of nickel producers will be able to recover their profitability and have a possibility to steer their way to increase nickel production from October - December quarter of 2009. Small nickel mines in Western Australia have already decided to resume their nickel ore production and a reduction of nickel production (estimated to be 20,000 tons) caused by the strike at Sudbury Division (to produce 85,000 tons / year) is expected to be fully compensated by an increase of nickel production at small nickel mines in Australia from October - December quarter. In addition, excessive stocks of nickel carried over from last year and supposed to be 200,000 tons have existed in the market and, therefore, a possibility to revise higher nickel prices in autumn and afterwards has been involved in the market. For a reference, the average prices of LME nickel in June of 2009 were <> US$14,960.45 per ton (US$6.786 per lb.) for cash and <> US$15,041.59 per ton (US$6.823 per lb.) for three-month futures. |
| last modified : Fri 07 Aug, 2009 [10:25] |
