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.
AMMs 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 Exchanges 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 dont know; stainless still seems pretty lousy," one producer source said.
"The fluctuation in the nickel price has helped, but theres 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. "Theres over 210,000 tonnes on the LME, and every day it reaches a new record level. The fundamentals havent 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; were 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 dont speculate," he said. "Its a Catch-22: If they needed it, the price wouldnt be so low. Im not going to build inventory when the prices could be higher in a month. People dont have any insight into the next 30 days, let alone the next four to five months."