is likely to buy more refined nickel on the international
market in the next few months due to falling London Metal
Exchange prices, market participants said.
LME nickel prices settled at $13,610 per tonne on June 26. The
price has fallen more than 20 percent so far this year and in
late May reached its lowest level since 2009.
Subsidiaries of the
Peoples Liberation Army (PLA) have already ordered about
60,000 tonnes of the metal from the international market this
year and have plans to purchase more to take advantage of the
recent price slide, according to media reports.
"The current nickel
price has reached a four-year low, so it should lead to
increased buying," a major market participant said.
Meanwhile, with the
narrowing price gap between refined nickel and nickel pig iron
(NPI), steel mills interest in buying the former should
revive, sources said.
"As the price of
nickel ore is firm but the price of NPI still falling, ...
domestic NPI smelters have no way to reduce losses apart from
cutting production," said a trader from Shanghai.
Chinese NPI smelter
operating rates have recently fallen to about 50 percent
because of the market conditions for the product.
The price of refined
nickel plate now stands about 6,000 to 7,000 yuan ($968 to
$1,129) per tonne higher than high-grade NPI (Ni content 10 to
15 pecent), down from more than 10,000 yuan.
Meanwhile, some market
participants also mentioned that increasing numbers of
nickel-related finance deals will also cause the countrys
imports to rise.
"Copper is now
difficult to finance, due to the strict checks by the State
Administration on foreign exchange, so this business is now
moving to other products like nickel in order to get credit
from banks," said a trader from Zhejiang.
In the past five months of this year, China imported a total
of 74,787 tonnes of refined nickel, up 21.5 percent year on
A version of this
article was first published by AMM sister publication Metal