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Nickel Price Bottoming Out ?/Inquiries Of Cold Stainless Upsurging
This week, the LME nickel price reached $7.60 per pound which recorded the lowest price same as the level on December 15, 2009 when the Lehman's shock happened in that year. It is uncertain whether this affects the market but inquiries of cold-rolled Ni-system stainless steel sheets from distributors of Taiwan and South China are increasing. Instead of spot purchase till now, such inquiries are for 3 months in bulk, and customers are embarking on replenishment of inventories judging that the present price is a bottom.

Usually, from November to December, the nickel price becomes the lowest in that year, and dealing of cold stainless sheets becomes sluggish in the end of the year. In this year as well, the nickel price hit the lowest, and in the Asian market, prices of Ni-system cold stainless sheets are the level of $2,850 to 2,900 C&F dipping below $3,000 at present.

The average LME nickel prices were $9.30 per pound in September, $8.60 in October, and $8.10 in November. For these 3 months, it dropped by 1.2 points. One point down of nickel price is equivalent to $200 down of products. With this, corresponding to drop of the nickel price, prices of products decreased by $240 or so to $2,900 C&F for these 3 months from $3,150 C&F in September. The present offer prices are $2,850 C&F by Korea's POSCO, Taiwan's YUSCO and so on, and the level of $2,900 C&F by the Japanese mills. Attention is attracted to see whether the price level becomes a real bottom in the export market. As each customer has been devoted to spot purchase till now, such customer seems to have little inventories. For that reason, if the present one is a bottom price, purchasing is expected to spread rapidly.

POSCO of Korea maintained its domestic price of cold stainless sheets for December shipment on the same level. Its levelling off of prices has continued for 3 months in a row. The company's list price is 3,780 thousand won ($3,287) per ton. However, this list price is not carried out. It is reported that the discount range had been 100,000 won ($87) before but at present, it has expanded to 400,000 to 500,00 won ($348 to 435). Therefore, its actual price seems to be the level of 3,200 thousand won ($2,783) or so.

Taiyuan Iron and Steel also maintained its price for December shipment at the current level. The company maintained its prices on the same level during these 4 months except November's decrease by 2,000 CNY ($317). The current price is 22,100 CNY ($3,508 tax inclusive and $3,174 tax exclusive) but it seems too much to be decreased considering the nickel price level. The market price of Wuxi is 20,000 CNY ($3,174), and from this level as well, it the range of price decrease in November seems too much. YUSCO of Taiwan is expected to announce its December prices in a couple of days. It is foreseen that YUSCO will decrease its price by 100 or so converted into dollar because of the price drop of nickel by 0.5 points in November from that in October.

Each customer is struggling against repayment to a bank in the end of the year. With this, among the distributors, some are facing a financial difficulty while some are moving on to replenishment of inventories seeing the future trend.

Meantime, almost any change in the Cr-system cold stainless sheets cannot be seen for the time being. In case of SUS430, its market price is the level of $1,500 C&F while the Japanese mills' offer prices are hovering at the range of $2,000.
last modified : Tue 06 Dec, 2011 [13:58]
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