Covid-19 will hit LME nickel hardest of all base metals - Citi

End-use demand for nickel will be so badly affected by Covid-19 that the London Metal Exchange nickel price will recover at the slowest pace among the base metals, Citi analyst Oliver Nugent told Fastmarkets.

“We were struck by the effect of the Covid-19 pandemic on nickel - this has been a game changer for the market,” Nugent said. “Nickel is going to be the worst-affected base metal by end-use demand, which means it will be slowest to recover.” The bank forecasts a 15% drop in end-user demand for nickel year on year in 2020, increasing the likelihood of a significant reduction in investment interest. In the event of such a pullback, Citi’s three-month price target for the LME nickel price would be $11,000 per tonne, a 10% drop from its current level. The three-month nickel price was most recently around $12,225 per tonne on Friday May 29. “In the event of a short-term pullback in risk, nickel would be the most bearish base metal,” Nugent added. But Citi is not all-out bearish on nickel - it takes the medium-to-long-term view that nickel will underperform rather than...

Published

Amy Hinton

May 29, 2020

16:02 GMT

London