The year 2015 has been rough for base metals, especially for nickel. Economists say that the only way for nickel to escape bearish prices are better economic data from China. This would revive local steel makers’ once voracious consumption.
Nickel prices on the global market remain disappointing. On the last trading, nickel closed 0.5 percent weaker to $US10,800; the US dollar regained its position as the dominant global currency.
The third quarter has started off quite coarse after nickel prices on the SHFE and LME collapsed in late June. This came at a time when Norilsk brands were made good for delivery. The base metal’s price slid to a disappointing $10,795 before rebounding to $12,000. But this didn’t stay for long as the market rout in China suppressed commodity prices anew.
Some experts say that the third quarter is not expected to be different from the past quarters as Chinese consumers remain reluctant of upgrading their imports unless a sudden supply glut happens. But this is very unlikely to transpire as production remains high, even those that are coming outside usual supply heavyweights such as Australia and the Philippines.
In Russia, a mining company that has just obtained pre-production license from the government is expected to join the global market next year right after it finishes the infrastructure upgrades on its Kun-Manie project. Amur Minerals (London AIM: AMC) started to gain popularity among metal investors in 2014 for its promising would-be ore production, and its market appearance could alter the supply sector dramatically.The company could also help steel producers outside Asia, who are now having problems obtaining high-grade ore. Indonesia prohibited its ore exports after the Philippines announced that it would put most of its efforts in satisfying demands coming from China.
“Nickel prices were bouncing along the bottom, under pressure from plentiful supply, high stocks, and weak demand while the global economy struggles to make headway. Prices suffered a knee-jerk sell-off—tightness in China was wiped out when the SHFE approved Norilsk brands as good delivery,” a data from Fastmarkets.com revealed.
Nickel is still relevant
Sumitomo Metal Mining Co., Japan’s biggest nickel producer, is expecting another surplus as demand growth in China remains sluggish. The company said that supply will top demand by almost 12,000 metric tons in the remaining months of this year. The recent statement is a bit higher from its first forecast in April. Back then, the company said would be a 5,000-ton deficit.
“Worldwide demand for nickel is seen to remain flat this year due to the slowdown in China’s growth and a demand slump in Western countries,” Hiroshi Sueta, general manager at the nickel sales and raw materials department, told the press.
The company also said that nickel production will decrease by 1.5 percent to 1.947 million tons in 2015. This could change metal prices as consumption will remain at 1.935 million tons.
Nickel’s road to recovery
TD Securities commodity strategist Bart Melek also believes that it is not yet late for nickel to recover. Melek predicts that it will languish at just under $5 a pound in Q3 of this year. He added though that the metal will bounce to $6.80 in the next quarter.
Even HSBC is confident that investors could still see nickel displaying decent prices this year. Most are expecting a 53,000-metric ton deficit in the nickel market; prices would average at a staggering $15,120 per metric ton. This is promising, as the base metal has never gone past the $13,000/ metric ton mark this year.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
UrbanFisio Launches Virtual Assistant to Surpass €1 Million by 2021
The company UrbanFisio had a turnover of $1.03 million (€878,000) in 2020 and expects to reach $1.53 million (€1.3 million)...
How Rating Discrepancies Undermine ESG
According to some experts, companies with higher sustainability scores have better risk management and compliance standards, leading to fewer extreme...
Elon Musk Said Tesla Will Accept Bitcoin Again
After Tesla accepted Bitcoin as a means of payment in March 2021, the company revised the decision again just two...
Trusters’s Real Estate Crowdfunding Fund Raised €7.3 Million in Six Months
In the first half of the year, the real estate lending crowdfunding platform Trusters raised $8.6 million (€7.3 million), almost...
Nowture Enters the Capital of the Spanish Biotech Company Libera Bio
Nowture is a comprehensive ecosystem that invests in and offers a global model of support services for transformative companies in...
Featured4 days ago
Markets May Have Hit a Temporary Top that Could Continue into September
Business4 days ago
Extended Reality Investment Alert: XRApplied (XRA) Conditionally Approved to List on CSE
Business4 days ago
Why T-Bond Yields Increased in the Past Three Decades
Crypto3 days ago
Canada Continues to Embrace Cryptocurrencies