NEW YORK Spot nickel premiums continue to languish as contract business covers consumer requirements, with one seller claiming that even an uptick in business activity might not lift domestic premiums.
Melting-grade premiums were unchanged at 18 to 25 cents per pound Feb. 27, while plating-grade premiums remained at 50 to 60 cents per pound.
Demand was still low, with the majority of consumers satisfied by contract business, market participants told AMM.
"I dont think theres a lot of spot business right now. Many of our customers dont rely on coming into the spot market unless business is super good, and its not been super good for a while," one trader said.
A global surplus of nickel supply will likely keep premiums low into the near future, a second trader said.
"Even if business did pick up, theres so much nickel out there, and a lot of scrap, that I cant see prices going up. ... The problem is the first quarter is usually your best, so it could be a rough year," he said, adding that some of his customers expressed concern that the Obama administration could implement spending cuts that would further hurt nickel end markets, particularly in the military sector.
"Its hard for it to get any worse. Business, overall, is still lousy in all aspects. We really cant go any lower than we already are," he said.
Three-month nickel ended the London Metal Exchanges official session at $16,720 per tonne ($7.58 per pound) Feb. 28, down 9 percent from $18,375 per tonne ($8.33 per pound) on Feb. 13.