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(AMM) US nickel premiums soften as Vale Inco gears to re-enter market

March 15, 2010 - 21:36 GMT Location: NEW YORK

KEYWORDS: nickel premiums , Vale Inco , stainless

Nickel premiums have come off record highs in the United States as Vale Inco Ltd.'s Canadian nickel is poised to step back into the market to some degree and service centers have already completed much of their second-quarter stainless steel buying ahead of higher April surcharges, market participants said.

Spot premiums for truckload quantities of plating-grade nickel range between $1 to $1.10 per pound over London Metal Exchange prices, down from $1 to $1.20 previously, nickel traders said, while the range for melting-grade premiums decreased to 85 cents to 95 cents per pound from 90 cents to $1.10 previously.

"Business has been pretty constant in the past week," one U.S.-based nickel trader said. "We booked a full truckload of 4-inch by 4-inch melting grade at 90 cents (per pound). The premiums are still up there despite Vale bringing in the contractors."

Nickel is still tight for prompt delivery, he added, noting that even forward orders are being completed at healthy premiums in historical terms.

"We have a couple contracts in place for April, May and June for roughly 95 cents (per pound). That could be because these customers don't really know better or are...

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