Nickel highlights

摘要

Three-month nickel prices have remained surprisingly robust, setting a new official high at exactly 50,000 dollars/tonne on April 24. However, as has been the case recently, profit-taking and producer selling promptly brought them down again - suggesting some nervousness in the market. The possibility of prices turning lower and falling sharply remains. So far, however, dips remain well supported, and without continued physical inflows into LME warehouses a correction is unlikely to be sustained. There are two factors that could combine to undermine the recent surge in nickel prices. First, demand for nickel from the all-important stainless steel sector looks set to fall back in the second quarter of 2007. A number of producers are seeing lower order levels and are already cutting back their base prices. Secondly, on the supply side, is how effective China's nickel pig iron experiment proves to be. Judging by the latest surge in imports of low-grade laterite ores, to a new record high in March and up by 1,128 percent year-on-year over the whole of the first quarter, the experiment seems to be going very well. MBR estimates that China imported around 21,000 tonnes of nickel in this form in the first quarter of 2007, which compares with net imports of 23,000 tonnes of refined metal.