Nickel highlights

摘要

At least some market participants seem to have grabbed on firmly to nevus that production could fall short of expectations, and that ready nickel availability may not be as abundant as it at first might seem on paper. Nickel prices charged straight through $17,000/tonne barely pausing to catch a breath. The bull momentum in the nickel contract carried on, while some other contracts flagged, to fall just short of reaching $l8,000Atonne. However, we believe that much of nickel's relative strength seems to be coming from the short covering activity, which in most likelihood is related to the large short position which has been building since early 2012. There is little evidence as yet of many major new longs entering the nickel market, and at $18,000/tonne prices have overshot even our fourth-quarter projections. Nevertheless, while nickel may have temporarily outperformed copper, overall copper is fast approaching early 2012 highs. Nickel is still doing nothing of the kind. We would not be surprised to see a sharp downward correction in nickel overthe next week or so, to take prices back to around the$17,000/tonne mark as we move into the fourth quarter.