Latest rally in nickel unsupported by market fundamentals

摘要

The recent upswing in nickel prices took many by surprise. Since the global nickel market remains in surplus - with output exceeding demand by 39,400t in the first quarter of 2009 - we do not expect the upturn in prices to last for long. While the monthly increase in reported nickel stocks has declined steadily since February, and inventory held in LME warehouses may even decrease in May, stocks remain high by any standard. Analysts seem to agree that only the return of strong end-user demand or further substantial cuts to nickel output will draw down inventory and accommodate a sustainable increase in prices. At present we appear to be a long way from such a scenario.