Nickel highlights

摘要

Nickel prices dropped back beneath 20,000 dollars/tonne during February, which we anticipated. LME nickel stocks are steadily increasing, suggesting that there is little evidence of traditional first-quarter consumer restocking ahead of the normal pick-up in industrial/construction activity. Collapsing premiums are adding weight to this argument. With material readily available, and the threat of much more to come, consumers feel confident in leaving their buying to the last minute. There is certainly more downside potential for the nickel price when looking at the contract from a fundamental viewpoint. But as has recently been the case, the macro mood will play an overbearing part, and we would expect to see a bounce in nickel prices now that there has been a positive conclusion to the Greek bail-out package. But, beyond this, we do not see rallies back over 20,000 dollars/tonne as being sustainable, especially with concerns mounting about the Chinese outlook too.