At first sight, the start of the second quarter has brought few changes to the nickel market. Demand is lacklustre, there is easy availability of nickel and the LME cash price is trading at levels of between 28,000-30,000 dollars/t. But on greater reflection, some significant developments are underway. Stainless steel production is increasing on a quarter-on-quarter basis, albeit slowly, and should show year-on-year growth in the April to June months. The austenitic ratio has also recovered from last year's lows, as the cutbacks, which almost exclusively involved 300 series material, were phased out in many countries as early as January. In addition, the large overhang of non-LME deliverable nickel, mainly scrap and ferronickel, has been more or less wound down and there are signs to suggest that world nickel output, especially nickel pig iron, may fall short of expectations this year.
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