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Nickel buying picks up, premiums steady

Keywords: Tags  nickel premiums, melting-grade nickel, plating-grade nickel, nickel demand, London Metal Exchange, LME, nickel prices, Daniel Fitzgerald

NEW YORK — Nickel market participants said that spot trading activity has picked up in recent weeks, but not enough to move premiums up from record lows.

AMM’s melting-grade nickel premium is steady in a range of 15 to 25 cents per pound, while plating-grade premiums remain at 50 to 60 cents per pound.

The London Metal Exchange’s three-month nickel price closed the official session Aug. 29 at $14,135 per tonne ($6.41 per pound), down 4 percent from $14,730 per tonne ($6.68 per pound) two weeks earlier.

"The last three weeks picked up a little. Maybe the nickel price got so low that people were forced to buy. How long it will last I don’t know; stainless still seems pretty lousy," one producer source said.

"The fluctuation in the nickel price has helped, but there’s still a lot of hand-to-mouth buying," a trader said.

A second trader cautioned that market fundamentals were unlikely to support an increase in premiums "for some time."

"Nobody has taken out any capacity substantial enough to make a difference," he said. "There’s over 210,000 tonnes on the LME, and every day it reaches a new record level. The fundamentals haven’t changed; there has to be less nickel and more demand."

One consumer source said that his business had not picked up sufficiently for his company to seek spot nickel on a regular basis, despite low prices.

"There are not a lot of spot needs; we’re covered by contracts and our order book is not strong. I guess anything under $15,000 per tonne is a good deal, but if you look at the order book, no one is ready to buy five loads to put into their inventory. I would have trouble selling the idea that we have to buy extra inventory right now. Most of the steel companies are conservative; they don’t speculate," he said. "It’s a Catch-22: If they needed it, the price wouldn’t be so low. I’m not going to build inventory when the prices could be higher in a month. People don’t have any insight into the next 30 days, let alone the next four to five months."

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