Nickel highlights

摘要

While nickel prices managed to avoid a collapse in the order of last year's LME Week sell-off, the metal didn't manage to escape LME Week 2005 unscathed. Three-month nickel prices have averaged 11,765 dollars/tonne (5.34 dollars/lb) so far in November, following on from an 11.7 percent decline in October's average price month-on-month to 12,435 dollars/tonne (5.64 dollars/lb). Three-month prices are now some 30 percent below the year-to-date highs of 16,625 dollars/tonne (7.54 dollars/lb) set on June 6 earlier this year. Furthermore, since early October, the market has spent the majority of time in contango, indicating that nearby tightness is no longer an issue. Nickel's decline to an 18-month low has been precipitated by the fall in demand from the key stainless steel sector - accounting for to around 66 percent of demand in 2004. Inventories have subsequently been trending upwards at an ever-quickening rate. LME stocks hit their lows for the year in mid-May at 4,926 tonnes. Since then, average daily inflows can be seen in the chart below. After announced production cuts for Q2 and Q3 2005, purchasing from the industry declined - leading to the inventory build.