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Nickel premiums hold as stocks rise

Keywords: Tags  nickel prices, nickel premiums, melting-grade nickel, plating-grade nickel, London Metal Exchange, Rey Mashayekhi


NEW YORK — Nickel spot market trading activity remains stagnant, traders said, although there are reports of sellers pushing material at lower premiums as London Metal Exchange nickel stocks continue to rise.

AMM’s melting-grade nickel premium remains in a range of 15 to 25 cents per pound, and the plating-grade premium at 50 to 60 cents per pound.

The LME’s three-month nickel contract closed at $13,660 per tonne ($6.20 per pound) Sept. 12, down 3.4 percent from $14,135 per tonne ($6.41 per pound) two weeks earlier.

With LME nickel warehouse stocks reaching 217,650 tonnes Sept. 11, traders noted the limited level of business being done and the potential effect that oversupply might have on premiums going forward.

While most agreed that premiums at large remained between 15 to 25 cents per pound, one trader said he had heard of a sizeable sale to a producer at a 10-cent-per-pound premium.

A second trader said there was "no doubt" about premiums being pushed downward due to market conditions.

"I have to be honest, if I can sell cathodes at a 25-cent premium, I’d make a lot of money," a third trader said. "The reality is business is so bad, it’s a factor of getting business at whatever prices you can get it."

However, "I don’t think you can look at someone buying 10 cents and say that’s representative of the market," he added. "You also have to consider that you got producers who need to get some cash on their books, and they’re willing to move large volumes of whatever excess products they have at pretty reasonable prices."

A fourth trader said he felt miners might start to cut back production "in the not-too-distant future, as demand has not been as strong as anticipated or hoped for."

However, a 10-cent premium seemed "more of a one-off" and "not indicative of the wider market," he added.


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