Nickel market facing challenges

13 Oktober 2012

Nickel market facing challenges

Monday, October 31, 2005

MORE challenges lie ahead for the nickel market after a tough six months which have seen prices plunge by 30%, according to a survey of analysts ahead of the annual round of conferences this week at the London Metal Exchange.

Nick Moore from ABN Amro told Dow Jones that stainless steel import/export data from China was an important element in the future direction of the nickel price.

"We\'ll be watching Chinese data to see whether China will continue to be a net importer of steel," Moore said.

"In developing its own domestic stainless steel industry, it remains pivotal to the outlook for steel.

Cuts in European stainless steel production are seen as a major cause behind the fall in the nickel price from around $US17,000 a tonne in May to more recent trades around $US11,850/t.

Over the past three months ThyssenKrupp, Arcelor and Outokumpu are reported to have cut 600,000 tonnes of stainless steel output, a fall which represents a loss of 45,000 tonnes of nickel consumption.

Combined with the stainless steel cuts there has been the effect of new mines starting, including Voisey\'s Bay in Canada which has is contributing an annual 60,000 tonnes of nickel a year.

Metal experts believe that over the next five years an additional 300,000 tonnes of nickel will hit the market, a supply increase of 23%.

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