Nickel

Nickel

Postby winston » Tue Jul 22, 2008 10:04 pm

Nickel Prices to Fall as Steelmakers Cut Purchases (Update1)

By Debarati Roy

July 22 (Bloomberg) -- Nickel prices may average as much as 46 percent lower this year as steelmakers increased production of low-nickel content products, said Jindal Stainless Ltd., India's largest stainless steel producer.

Nickel will average between $20,000 and $25,000 a metric ton this year compared with an average $37,089 a ton last year, said Arvind Parakh, a director at the New Delhi-based company.

The metal is headed for a second straight annual drop, after last year's 21 percent decline as stainless-steel mills resorted to products containing less nickel. The use of nickel in making stainless steel may fall 9.5 percent this year, metals research firm Heinz H. Pariser said July 9.

``Stainless steel customers are holding back their purchases to watch if prices will fall further,'' Parakh said in a phone interview in New Delhi today. The share of low-nickel-content stainless steel has increased to 37 percent of the total output for the alloy, up from 25 percent three years ago, Parakh said.

Last year, global nickel production was 1.43 million tons, compared with demand of 1.33 million tons, said Adam Rowley, an analyst at Macquarie Group Ltd. in London. China accounts for a quarter of the global demand, he said.

``This year there will be a slight oversupply'' at 1.45 million tons compared with an expected demand of 1.44 million tons, he said.

Goldman Sachs Group Inc. reduced its nickel forecasts for this year through 2010 because of surplus supply. Prices will average $24,522 this year, 15 percent less than the previous estimate, the bank's analysts said in a report published last month. They cut the 2009 forecast by 34 percent.

Nickel for three-month delivery on the London Metal Exchange traded at $20,600 a ton, up 0.3 percent, at 4:35 p.m. India time.
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Re: Nickel

Postby winston » Mon Jun 01, 2009 3:09 pm

DJ MARKET TALK: LME Nickel At 2009 High; China Demand Strong-Macq

0524 GMT [Dow Jones] LME 3-month nickel at 2009 high of $14,290/ton, up $350 since Friday's kerb with 163 lots, higher than normal volume. Macquarie bank says nickel rallying on indications Chinese stainless steel production is ramping up.

Bank says in report that Tisco and Baosteel both running at 90% above their production utilization rates in 2Q and that stainless mills struggling to find nickel.

"There are also reports that Taiwanese stainless mills have ramped up production to meet rising Chinese demand, but Korea and Japan remain depressed," says report. Macquarie says that nickel now well supported, likely to stay above $12,000 level, but is not overly bullish, noting some uncertainty on level of Chinese stockpiles, likelihood that nickel suppliers could react relatively quickly to price, demand recovery by announcing production restarts.
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Re: Nickel

Postby winston » Wed Sep 09, 2009 3:59 pm

DJ China Nickel Prices To Stay Firm On Demand, Restocking -Barcap

BEIJING (Dow Jones)--Some 40,000 metric tons of capacity in nickel pig iron production has been in operation so far this year, but current consumption levels have kept domestic nickel prices firm, Barclays Capital said in a report late Tuesday.

Despite the potential for further capacity to come online due to higher prices, the strength of the restocking cycle among developed economies and robust demand in China should keep the global market in a 16,000-ton deficit in the second half of the year, and extend to a 22,000-ton deficit in 2010.

This should result in an average price of $21,000/ton in the fourth quarter, followed by $23,375/ton in 2010, according to Barclays.

London Metal Exchange nickel prices were $18,200/ton around 0600 GMT Wednesday.

Chinese spot nickel prices have risen about 6% in a month to CNY137,500/ton Wednesday, from CNY130,070/ton, as quoted on the Shanghai Nonferrous Metals Market.

'From a bearish perspective, analysts have pointed to the steady trickle of material into the LME's Rotterdam warehouse, where stocks have risen by 11,000 tons over the past month to 117,000 tons, as evidence of oversupply,' Barcap said. 'In our view, these...perspectives on nickel are misplaced.'

While acknowledging that the level of Chinese nickel pig iron production restarts has been difficult to gauge, OECD demand recoveries in the nickel market have 'typically been very aggressive' in recent years, according to the note.

'Stainless mills in Europe report that order activity picked up in July, with restocking by distributors the key driver so far. Activity is likely to escalate further.'

Source; Chuin-Wei Yap, Dow Jones Newswires
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Re: Nickel

Postby winston » Wed Dec 23, 2009 3:44 pm

DJ Zambia Munali Nickel Mine Targets 1.2 Mln Tons By 2012 -Report

Zambia's Munali Nickel Mine plans to raise annual ore output to 1.2 million metric tons by 2012 following its takeover by Chinese-owned Jinchuan Group, the Times Newspaper of Zambia reported Wednesday.

The state-owned daily quoted General Manager Xin Xining as saying that development and production of nickel was expected to start in January. Zambia's only nickel producing mine was placed under care and maintenance early this year due to low global nickel prices.

Munali expects to produce 750,000 tons of nickel ore next year and 1 million tons in 2011, it said.

Newspaper Web site: www.times.co.zm

Source: Nicholas Bariyo, Dow Jones Newswires
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Re: Nickel

Postby winston » Wed Feb 22, 2012 6:57 pm

Record Nickel Supply Expanding Glut Thwarts Rally: Commodities By Jae Hur and Ichiro Suzuki

Mining companies and refineries are producing more nickel than at any time in history, expanding a glut that threatens to reverse this year’s rally.

Production will exceed demand by 45,000 metric tons, a 73 percent jump from 2011, Barclays Capital estimates. That’s equal to 46 percent of stockpiles tracked by the London Metal Exchange.

Refined output will rise 12 percent, the most in at least eight years, according to Morgan Stanley.

Prices, which rose 7.9 percent to $20,180 a ton this year, may fall as much as 13 percent to $17,630 a ton by Dec. 31, the median of 11 analyst estimates compiled by Bloomberg shows.

http://www.bloomberg.com/news/2012-02-2 ... ities.html
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Re: Nickel

Postby winston » Mon Jan 28, 2013 8:04 pm

Nickel: Nickel remains at mid-2009 lows due to a growing oversupply and weak demand, but should rebound over the next two years.

Nickel ended 2012 at $17,448/metric ton. The 2013 projection is $18,300/metric ton, a 4.88% increase from 2012.

The 2014 projection is $19,800/metric ton, up 13.48% from 2012.


Source: MS
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Re: Nickel

Postby winston » Tue Sep 02, 2014 5:21 pm

Goldman Sachs: Refined nickel price may rise to USD22,000/ton in 2015

According to the latest research report by Goldman Sachs, the market of refined nickel had improved, and the bank believed the refined nickel price is very likely to move up continuously in 2015, and the price may reach USD22,000 per ton next year.

Source: AAStocks Financial News
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Re: Nickel

Postby winston » Mon Dec 22, 2014 11:43 am

Nickel Shortage Propels Philippines Mining Boom: Southeast Asia

Michael Defensor is racing to mine and ship nickel from projects across the Philippines to plug the gap in global supplies left by Indonesia’s ore-export curbs.

http://www.bloomberg.com/news/2014-12-2 ... -asia.html
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Re: Nickel

Postby winston » Mon Jul 06, 2015 10:14 pm

This Metal Is Nearing Another "Boom" Phase By Matt Badiali

There's one lesson every resource investor eventually learns…

Natural resources go through huge cycles of boom and bust.

The prices of commodities are based largely on supply and demand. If demand outpaces supply, prices will rise. But if supply outpaces demand, prices will fall.

That's what we've seen over the past few years with nickel…

Nickel is a critical component of stainless steel, which is used in construction, cars, cookware, jets, and appliances.

Thanks to increased consumption from China in the mid-2000s, demand for nickel rose faster than supply… and prices soared from around $5 per pound in November 2005 to more than $24 per pound in May 2007.

At the time, Chinese demand for stainless steel seemed endless. Executives from the world's largest nickel producer, Norilsk Nickel, said "demand from China will keep prices close to a record."

With high prices, producers could afford to bring more expensive nickel mines online. For example, in 2007, mining company Xstrata acquired Jubilee Mines for $2.9 billion to gain control of its Cosmos nickel mine.

Jubilee produced about 26.4 million pounds of nickel in 2007, with plans to ramp up to 66 million pounds by 2012. So in effect, Xstrata paid nearly $110 per pound of nickel production, with the hope that production would grow and cover the cost.

But then the global financial crisis hit… demand dropped… and nickel entered "bust" mode. As you can see in the chart below, nickel prices ran full circle. They are down nearly 80% from their 2007 peak. Today, a pound of nickel is worth around $5.35.

Please Enable Images to See this

Now, years of low prices have made many nickel mines uneconomical. So producers are shutting down and selling off expensive mines.

For example, after acquiring Xstrata – and Cosmos – two years ago, giant miner Glencore is now selling Cosmos for $19 million to Australian miner Western Areas.

Western Areas is getting the mine for less than 1% of the original purchase price in 2007. That means Glencore is losing $0.99 for every dollar Xstrata invested in the original Jubilee deal. Bloomberg Business has called this "one of the mining industry's most value-destructive deals."

And Glencore isn't the only giant miner unloading once-expensive nickel mines. Barrick Gold is looking to sell its Kabanga nickel project in Tanzania, which it operates with Glencore. And Vale, the world's second-largest nickel producer, also has assets on the auction block. Those include the iconic Voisey's Bay nickel mine in Canada.

This might sound like bad news… but it's actually good for the sector.

You see, the low nickel price is killing off production. Expensive mines are being shut down and sold off.

But we still need stainless steel to make things like appliances and cars. We still use it in construction. And countries like China still need it to continue to develop.

So with production dropping, eventually, demand will outpace supply again… prices will start to rise… and nickel will enter a "boom" phase again.

We're not there yet, but deals like Glencore's tell me we're getting close.

Source: Growth Stock Wire
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Re: Nickel

Postby winston » Mon Feb 06, 2017 1:32 pm

The Secret That's Driving This Industrial Metal

by Sean Brodrick

Last year was very shiny for nickel. The metal's price rose about 15%. What does 2017 hold? The easiest path for this industrial metal is higher... but not for the reasons you think.

Most people think of nickel as the U.S. five-cent piece. Actually, those coins are only 25% nickel. The rest is copper. What's more, the value of the metal in a nickel is now about $0.07!

It's so bad that in December of last year, the U.S. Mint banned the melting or exporting of nickels. It also forbade the exporting of pennies. Because, you guessed it, the metal in a penny is worth more than $0.01. Here's another brain squeezer: Pennies are only 2.5% copper; they're 97.5% zinc!

I'm in danger of being distracted by copper - another shiny object - so let's get back to nickel.

Foreign Suppliers

Here's the thing. The last time I wrote about base metals, they were all charging higher. Nickel got a boost from demand, but also pinched supply.

The Philippines accounts for about a fourth of global nickel supply. In 2016, up to 30 nickel mines were suspended. The government cracked down due to what it deemed "irresponsible mining."

Then at the end of the year, nickel hit the skids for a bunch of reasons. It's still up about 8% from where it started in 2016. But recently, many folks wanted to stick a galvanized fork in nickel and call it done.

The problem is Indonesia. That country is another big source of nickel. It has an on-again, off-again, love-hate relationship with the mining industry. In 2014, Indonesia placed a ban on exports of nickel ore. Like Uncle Sam, it saw value in keeping the product at home.

What Indonesia wanted was for companies to process the ore in Indonesia, then ship the refined metal. But a lack of refineries threw a wrench in the works. So Chinese companies worked overtime to build nickel smelters in Indonesia.

Why does China care? Because Chinese stainless steel production reached 24.79 million metric tons in 2016. That's an increase of 11.87% year over year. And you can't make stainless steel without nickel.

A couple weeks ago, Indonesia announced it was lifting its ban on exports. More supply puts pressure on prices. That's why nickel prices are under pressure.

But I believe Indonesia is shooting itself in the foot. While dangling the carrot of lifting the export ban, the government whacked miners with a big stick. It passed new rules requiring miners to divest 51% interest in mining projects to local investors.

The sale can take place over a 10-year period. But still, we won't see new investment dollars stampeding into Indonesian mines.

Then, even more recently, the Philippines pulled the rug out from under nickel bears.

On February 2, that country ordered the closure of 23 mines for environmental reasons.

The majority of those mines are nickel producers. About half of the country's nickel production will be affected. Manila also suspended the country's top gold mine.

So that put a fire under nickel prices again. What a roller coaster!

It's a crazy world, so we'll probably get another pullback.

I believe any pullback in nickel is a heck of a buying opportunity.

For one thing, Chinese nickel stockpiles are low. Chinese manufacture of stainless steel is rolling along. And China's economy is growing. In fact, that country's manufacturing sector recorded the fastest expansion in four years in December.

"Depletion Point"

According to Wood Mackenzie, a global consultancy specializing in natural resources, nickel's rise will continue in the first half of 2017. And that's because ore stocks in China will approach a "depletion point" in March/April.

Wood Mackenzie specifically says China's stainless steel manufacturing is going to eat up nickel supply.

And it's not just China. Eurozone manufacturing data in December hit its highest level since April 2011. At the same time, an index of U.S. manufacturing activity rose to 54.3 in December from 54.1 in November. That's the strongest since March of 2015.

That's a heck of a lot of stainless steel manufacturing around the globe. And that increases nickel demand.

The International Nickel Study Group expects that global nickel demand will rise about 5.5% in 2017. And new supply will have a tough time keeping up.

It's not just stainless steel, either. The NSG says nickel demand "will maintain a positive trend in the aerospace industry and in the battery sector."

You'll Get a Charge Out of This

Ah-ha! Now we're getting to what I hinted at the start of this story. Nickel isn't just for stainless steel. It's also used in lithium batteries. In fact, battery demand for nickel rose a stunning 20% in 2016, according to Glencore, a huge mining company.

Have you seen the trend in lithium batteries? The compound annual growth rate for lithium-ion batteries between now and 2025 is projected to be 14%!

This demand is what juiced nickel demand in 2016. That's why there was a supply-demand gap of 67,000 metric tons. That had to be made up from stockpiles. This year, analysts at Macquarie expect the global nickel deficit to increase to 93,000 metric tons.

There are some good ways to play this. You could buy a nickel miner. The last time I wrote about base metals, I talked about the PowerShares DB Base Metals ETF (NYSE: DBB). Unfortunately, that fund invests in copper, zinc and aluminum - the three other base metals I talked about last time.

For more primary exposure to nickel, you should look at the iPath Bloomberg Nickel ETN (NYSE: JJN). It tracks the Bloomberg Nickel Subindex Total Return and has an expense ratio of 0.75%.

Volume is light. It averages 18,600 shares per day, sometimes a lot less. So anyone buying it shouldn't buy a lot at once and shouldn't chase it.

The outlook for metal prices is bullish this year. The World Bank says that, as a group, metals should rise 11% in 2017. Some will outperform. And nickel has the potential to be one of them.

Source: The Oxford Club
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