NEW YORK Melting-grade nickel premiums continue to languish in the 15- to 25-cent-per-pound range, with market participants reporting slack demand in the spot market.
Premiums dropped to a 10-year low at the end of March on the back of lackluster demand and domestic oversupply (amm.com, March 28), and have yet to recover, sources said.
"The spot market is dead. ... Premiums have not moved because no significant business is being done," one trader said.
"Im not surprised by that 15-cent number, although obviously its very low. Theres not much spot business (and) people need to get rid of material and get cash in, so there could be a lot of selling at a loss going on," a second trader said. "I think its just a short-term thing and we should see premiums coming up a little bit. I dont see that 15-cent premium being sustainable."
The London Metal Exchanges three-month nickel contract closed the official session at $16,055 per tonne ($7.28 per pound) April 11, down 3.9 percent from $16,700 per tonne ($7.58 per pound) March 28.
A third trader, reporting a slight rise in business over the past week, attributed the move to the drop in LME nickel prices. "It seems like a little bit of an uptick. Maybe because nickel dropped, it brought up a few new buyers," he said. "It picked up a bit, but that could end tomorrow. Anything is better than nothing, because its been so bad."
Plating-grade nickel premiums were also unchanged at 50 to 60 cents per pound.