NEW YORK Nickel
traders are waiting for production cuts or consolidation to
force a rise in premiums or official prices as the spot market
premiums were steady in a range of 15 to 25 cents per pound and
plating grade held at 50 to 60 cents per pound for truckload
The London Metal
Exchange three-month nickel contract closed the official
session June 20 at $13,815 per tonne ($6.27 per pound), down
8.4 percent from $15,075 per tonne ($6.84 per pound) two weeks
The plunge in nickel
prices to their lowest level since mid-2009 (
amm.com, June 11) failed to entice consumers into
the spot market, however.
"Weve had a few
inquiries recently, but nothing crazy, even with the market
prices where they are," one trader said.
"Its been down
for long enough that people are expecting it to keep on going,"
a second trader said. "If the price keeps on declining,
youll see some producers exiting the market or at least
cutting back. Im kinda surprised it hasnt happened
already. Something has got to give."
A third trader agreed
that the market would need the withdrawal of nickel production
to force the supply/demand equation back into balance and drive
up premiums and prices. "A lot of producers are losing money on
every pound at this level," he said. "You have the LME stocks
at 185,000 (tonnes); next week it will be at 190,000 and then
200,000. It just keeps going up, and the fundamentals are not
looking so good. There is no light at the end of the tunnel,
and I think well have overcapacity going into 2014."