While overall demand for nickel remains lacklustre, the supply of nickel units is starting to rise. The disruptions that were evident earlier in the year have begun to ease and, as a result, we expect supplies to increase over the next few months. One indication of improved availability is the recent stabilisation of LME stocks. Since mid-May, inventories held in LME warehouses have stopped falling and have even increased marginally over the remainder of the month and into June. In addition, stainless steel scrap and ferronickel continues to be readily available in Europe and the USA thereby prompting stainless steel producers to purchase this material instead of more costly primary nickel units. Scrap is currently traded at a discount of between 85-87% of the LME cash nickel price.
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