NEW YORK Spot
nickel premiums were unchanged Nov. 6, but some market
participants forecast an upturn due to a dwindling supply of
available material and low prices as stocks in London Metal
Exchange-listed warehouses reached another record high.
melting-grade premium held at 15 to 25 cents per pound Nov. 6,
while the plating-grade premium remained at 50 to 60 cents per
LME nickel stocks
reached an all-time record high of 240,408 tonnes Nov. 6. At
the same time, the LMEs three-month nickel contract
declined to $14,060 per tonne ($6.38 per pound), a 4.6-percent
decrease from the two-month high of $14,745 per tonne ($6.69
per pound) reached Oct. 22.
While some traders
said they were seeing a quiet market lulled by low demand and
underutilization of capacity at stainless mills, other
participants said that the amount of metal locked up in
U.S.-based warehouses could have reached a level where premiums
could rise due to the resulting tightness on the ground.
"Spot nickel got
tight," one market source said, blaming the tightness on a lack
of available spot nickel in North America. "I see premiums
going up in the short term. A lot of companies cut production,
people drove their inventories down to zero, business picked up
a little bit, and then nobody had any nickel."
Still, one trader
source cited downward pressure on premiums, mentioning that he
had "lost business at 15 (cents)."
However, a second
trader said he "(didnt) know anyone whos going to
sell below 15 cents" per pound.
"I would not be able
to offer at 15 (cents); I wouldnt make any money," he
said. "I personally dont see any downward pressure on
also noted that the industry was beginning to enter long-term
contract negotiations, with consumers "busy looking at 2014
volumes and business."
One market source
familiar with such discussions said consumers "are looking for
improvements from last years terms, but producers are
holding out to repeat the terms."
"People are cautiously
optimistic that 2014 is going to be better than 2013," another
market source said. "But overall, theyre still