While reported stocks are low and threats to nickel production have materialised, adding extra fuel to the fire is the fact that buying activity has been strong in the first few weeks of January. Indeed, some nickel producers claim to be completely sold out at the present time. Similarly to last year, the strength of demand is coming from the stainless steel sector. Offtake from other areas is generally poor, with the exception of the electronics sector and the battery industry. The latter are now showing more decisive signs of recovery, after a false upturn in the first half of 2002 due to re-stocking. The two key questions for nickel consumption for 2003 are how quickly will world melted production of stainless steel grow and what will happen to scrap availability? Last year, world production of stainless steel increased by 6 percent, which was surprising given the less than encouraging 3 percent rise in world consumption of stainless steel flat products. This year, we anticipate consumption of stainless flats to increase more rapidly, but the data suggests that growth in melted production should slow from 2002 levels, if stocks are to be kept in check. This could mean that world melted production of stainless steel increases by as little as 2-3 percent in 2003.
展开▼
