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Nickel prices fell to the lowest level in the past 6 years

13 August 2015
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On the London Metal Exchange (LME) nickel recorded another fall, and the price currently amounts to 10.455 US dollars per ton. LME Nickel Stock at this moment totals 454.410,00 t, 130.000 t more than last year.


In January last year, Indonesia introduced a ban on the export of raw ore. That move caused great concern in the industry of stainless steel. Indonesia is the world's largest producer of high value nickel ore, but on the other hand the largest worldwide industry of stainless steel, the Chinese one, based its production on the import of cheap raw materials from Indonesia. Concern and speculation caused the rise in the price of nickel, which increased by 37.5% in 3 months, from $ 14,101.25 / t to $ 19,401.08 / t.


Nickel price level June 2014 - June 2015

Nickel price chart


Along with the slowdown of the Chinese economy and the accumulation of supply surpluses, the demand for this metal began to decrease. From that moment, in July 2014, nickel prices continued to fall, and its current value is at the lowest level in the last 6 years.


Nickel price level July 2010 - July 2015

Nickel price level last 5 years


Analysts believe that the price below $ 11,000 is certainly not good, but it could be even worse. China will soon spend all reserves of Indonesian ore, and in the meantime all the others are waiting for development of the situation, making just enough stock they need for optimal serving the market. Price of nickel can not fall indefinitely. Some analysts think that the nickel market will liven up after the European summer break ends. The more cautious ones expect a little more stabilization and recovery of nickel prices over the next 18 months.


Experts generally agree that global consumption of stainless steel is not bad. On the contrary, the market is good and stable. Last year, many saw a good chance of making money when Indonesia imposed a ban on exports. This deficiency was soon covered by increased production from the Philippines. Nowaday problem of too much stock of stainless steel and big decline of nickel prices is caused primarily by a fall in Chinese consumption. Its the oversupply that stifles the market. Beside, the price of nickel is also influnced by the US dollar. Most manufacturers will be satisfied if this unfavourable period is overcomed without lowering the price below $ 10,000 per ton.


Price of nickel is one of the most important factors in creating the alloy surcharge. In January last year, the alloy surcharge was around € 1,000 / t, half year later following the culmination of the prices of nickel, the alloy surcharge amounted to € 1,395 / t, and the highest amount of € 1,444 / t was recorded in October. Since the alloy surcharge is corrected after delay of 2-3 months, if this trend continues, by the end of the year we can expect it below 1,000 € / t .

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