LME ASIA WEEK 2019: Nickel prices at risk of further downside amid growing supply headwinds

With LME Asia Week fast approaching, Fastmarkets MB takes an in-depth look at one of the topics likely to dominate discussions at this year’s event: the growing risk of supply-side headwinds for nickel prices.

Nickel prices face considerable downside pressure from increasing supply of two nickel-containing stainless steel raw materials – nickel pig iron (NPI) and nickel plate – as well as an abundance of stainless steel stocks in China, according to market participants. Supply of NPI – a low-grade ferro-nickel used as an alternative to pure nickel in stainless steel production – is expected to increase in China following Xinhai Technology’s commissioning of two rotary kiln-electric furnace (RKEF) lines by the end of April, thereby placing continuous downside pressure on nickel prices. “Xinhai Technology’s commissioning of the NPI production lines was expected but… the date of commissioning was earlier than the anticipated late-May or June. And you can see an immediate reaction in exchange prices, which started to nosedive from the day that Xinhai began testing the two new RKEF lines on April 18,” a Shanghai-based analyst said. The front-month nickel contract on the Shanghai...


Violet Li

April 29, 2019

06:00 GMT