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Melting-grade nickel premiums tumble

Keywords: Tags  premium, melting-grade, plating-grade, nickel, Thorsten Schier

NEW YORK — Melting-grade nickel premiums have fallen to a nine-and-a-half-year low as market sources reported little spot demand early in the new year.

"Unfortunately, it seems like the holiday period is continuing rather than ending. It’s one of the quieter Januarys that I can remember in nearly 40 years in this industry," a trader said.

AMM’s melting-grade nickel premiums fell to a range of 18 to 25 cents per pound Jan. 16 from 20 to 28 cents previously, with business for half and full truckloads reported at both ends of the range this week.

One source pegged premiums as low as 15 cents per pound, although no business was confirmed at that level.

Sellers said the overall lack of consumer interest was spurring them to chase any available business more aggressively.

"(I’d) rather reduce my premium to move the units than hold and pay the banks," a second trader said, referring to the financing costs of holding unsold material.

Sources suggested that a rise in the number of long-term contracts could be contributing to the slow spot market.

"I don’t think it’s a reflection of activity on the consumer level as much as it is a reflection of the amount of material that was purchased forward," the first trader said. "The producers have done a pretty good job (of locking up consumers on contracts), and that’s impacting what kind of spot business we see."

But one supplier said some end markets were particularly quiet starting the year. "Stainless is extremely slow and some of the stainless foundries have slowed down as well," he said.

Foundry demand was said to have buoyed melting premiums in late 2012 (, Dec. 5).

Plating-grade premiums remain between 50 and 60 cents per pound on a dearth of spot activity.

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