The nickel price has given a bearish performance in the past week, dropping more than 10 percent in the middle of the week. Recent economic data have also failed to improve the mood in the US and Europe. Concerns include declines in the global commodity markets, China's tightening of its monetary policy, and the rebound in value of the US dollar.
NorilskNickel has reported its nickel output was 71,000 mt in Q1, indicating no change year on year. Anglo American has claimed its nickel capacity will hit 180,000 mt by the end of 2020 - four times its current capacity - after its investment in BarroAlto and two other new projects. JNMC plans to produce 130-140,000 mt of nickel in 2011. The market is expected to swing from a close balance to oversupply in 2011.
LME Nickel stock (mt) versus nickel price ($/mt)
300 series versus 400 series market price ($/mt)
Specification |
Region |
Producer |
Price (RMB/mt) |
Price ($/mt) |
Change w-o-w (RMB/mt) |
201/2B |
Foshan |
Guangzhou lianzhong |
13,800 |
2,117 |
200 |
201/No.1 |
Foshan |
Guangzhou lianzhong |
10,900 |
1,672 |
100 |
304/2B |
Wuxi |
Ningbo Baoxin |
24,600 |
3,773 |
-700 |
304/BA |
Wuxi |
Ningbo Baoxin |
25,800 |
3,957 |
-700 |
430/No.1 |
Wuxi |
Taigang |
9,800 |
1,503 |
0 |
430/2B |
Wuxi |
Taigang |
11,600 |
1,779 |
-200 |
With the nickel price dropping down, a negative mood has affected the stainless steel market to a large extent, though slightly less so towards the end of the past week. The deal prices of 304/2B and 304/BA from Baoxin are $3,773/mt and $3,957/mt respectively, both with a $107/mt fall week on week.430 flats indicate a soft trend this week: the price of 430/No.1 flat steel is $1,503/mt and and the price of 430/2B is $1,779/mt. In the Foshan market, the 200 series has moved up slightly, with $2,117/mt for 201/2B and $1,672/mt for 201/No.1.
The stainless spot market has seen some low-priced supplies this week. Traders are less optimistic and this has impacted stainless prices. Transaction volumes have also been low in the past week. Furthermore, the Chinese government has announced its intention to raise the deposit reserve ratio. For the short term, the prospects for the market do not appear very bright.