Nickel

摘要

LME nickel prices have recovered modestly over the last month from the lows recorded in mid-May. On the back of renewed fund buying, the LME cash price rose above 12,000 dollars/tonne in early June, up from 10,500 dollars/tonne one month ago. Although physical demand for nickel remains subdued in all of the major consuming regions, there is more optimism now about developments in China. The overstocking of stainless steel and nickel in China this year has reduced fresh demand in the region to much lower levels than expected and, with the Chinese government's recent efforts to cool the economy, there was concern that demand for nickel might remain lacklustre for some time to come. Very recently, however, these fears have begun to dissipate as the major stainless steel producers in China have indicated that they will be unaffected by the government's plans to restrict investment and that their expansion projects will proceed on schedule. In addition, there have been signs that the de-stocking of stainless steel and nickel is now progressing and that, as a result, Chinese demand could start to pick-up again in the second half of the year. Under these circumstances, fund buying has driven LME nickel prices higher. Whether or not prices continue to rise, however, depends greatly on consumer demand in all regions. If the major stainless steel mills come into the market to secure third quarter volumes, there is potential for prices to gain upward momentum. On the other hand, if many are covered, and some undoubtedly are, then the funds will withdraw and prices are likely to drop back.