LME – Nickel prices have weakened continuously

LME - Nickel prices have weakened continuously

Balkan Business News Correspondent – 21.09.2011

Nickel prices have weakened continuously and as the market goes into surplus in 2012, prices will come under additional pressure. Added competition from Nickel-Pig-Iron, its superior cousin, does not bode well for prices either.

At the London Metal Exchange (LME), Nickel prices have fallen from around $29000/tonne in January to $21000/tonne as of September.

-The Nickel market is expected to be in surplus in 2012 and prices will inevitably fall further.
-Chinese production of NPI has been burgeoning in recent months (NPI) thanks to its lower costs and excellent anti-corrosive properties as compared to Nickel. Chinese NPI production may hit 30000 tonnes in 2011 against 20000 tonnes in 2010.

-Chinese use NPI in production of its 200 and 300 series stainless steel. This alone accounts for 70% of total Steel production.

NPI prices are currently cheaper than Nickel and this will determine how the nickel prices behave in future. As the market will be in surplus for 2012, prices will lower. But what we now have to see is whether nickel prices drop below NPI prices. And if so, can NPI sustain its advantage over nickel.

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