Three-month Nickel on the London Metal Exchange fell on Monday to a new 12-year low, falling as low as $8,175 per metric ton. The metal is the biggest loser on the LME this year, losing around 45% of its value on the year-to-date.

3M LME Nickel hits 12-year low

Three-month London Metal Exchange nickel has now hit a 12-year low. Source:

This year, we heard many times that since more than 50% of producers were underwater, prices were due for a recovery. But once again, the market has proven that production costs don’t determine the price of a metal, it’s what people are willing to pay that determines it.

Why is Nickel Still Falling?

Nickel has fallen on a poor outlook for its struggling steel sector as well as a strong dollar and China’s slowing growth. These two have also driven the entire metals complex down this year.

Nickel is the first metal falling below its 2009 low. With this, we believe the chances of other metals suffering the same fate have increased. Some base metals like copper are still trading well above their recession’s lows. Aluminum however, could be next.

stainless-nickel-L1It’s been a rough month for nickel prices following a brief glimmer-of-hope rally.

The base metal has slumped over the past four weeks with the nickel futures contract traded on the Multi Commodity Exchange (MCX) down more than 10% from its peak in October, according to a report from The Hindu Business Line. Additionally, global nickel spot prices have declined over the same time span, bringing domestic futures contracts down with them.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!

We must look east for a cause of this decline in nickel over the past year. Weak demand from major consumer China continues to be a major contributing factor to nickel’s struggles. According to the news source, industrial production, trade data and inflation have all been on a downward swing, bringing nickel down as well.

With both the short- and medium-term outlooks of nickel grim, it’s difficult to predict a strong rally at this point.

Metals Round-Up

Taking a closer look at the other base metals we cover, zinc and lead recently showed some promising price gains, but our own Raul de Frutos threw cold water on that development. As it stands, all industrial metals are reaching new lows with commodities falling across the board with no end in sight for these price collapses.

Any rally should be perceived to be short-lived with a sharp decline pending. “Metal buyers may want to think twice before committing to large volumes in this kind of market,” de Frutos cautioned.

How will base metals fare for the remainder of 2015 and into 2016? You can find a more in-depth nickel price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:


Our Stainless MMI held steady at 59 for the second consecutive month.

Free Sample Report: Our Annual Metal Buying Outlook

Nickel prices are hovering near the lows of 2009. That level is giving support to prices as traders remain hesitant on whether nickel prices can go below recession levels. While other base metals are still trading comfortably above recession lows, nickel could be the first industrial metal hitting that psychological level.

Stainless_Chart_November-2015_FNLAnother factor supporting prices this month is the speculation that Glencore Plc, the world’s fifth-largest producer of nickel, could cut nickel production following cuts to its copper and zinc output to reduce its heavy debt levels. Moreover, other industry shutdowns could follow given that 60% of the world’s nickel is estimated to be non-profitable at current price levels.

Can Prices Go Up?

Some analysts argue that Philippine ore won’t be sufficient to cover nickel pig-iron (NPI) producers’ capacity in China, tightening the nickel market. However, Indonesia is already working on producing more NPI, as the country is pushing to win more profit from its mineral sources. Chinese producer Tsingshan Group is set to triple its capacity to produce NPI in Indonesia as soon as May, having an installed capacity of 900,000 metric tons of NPI.

Even though nickel’s supply-demand dynamics may actually be tightening, the market is facing other problems:

High Stock Prices

A period of super-fast production growth has left record high inventories. Although LME stocks declined in October, they are still above 400,000 Tons, almost 5 times higher than in 2011. Such a huge overhang of metal is pressuring prices, removing any hopes of market deficit.

Demand Woes

The slowdown in Chinese demand is keeping a lid on any price increase. Moreover, investors fear that the worse is yet to come. So far, demand woes are trampling supply woes, underscoring that significant price increases won’t likely happen until demand fears vanish.

Free Download: The October MMI Report

Finally, rumors of an increase in US interest rates from the Federal Reserve are pushing the dollar higher. The dollar index is surging as foreign currencies tumble. This is another, and not less important, factor that will continue pressuring nickel prices.

What This Means For Metal Buyers

There is no point in making predictions. After this pause, nickel prices could go both ways but we wouldn’t discard the possibility of nickel falling below the lows of 2009. Buying only small quantities remains the dominant purchasing strategy but buyers should watch nickel’s support and resistance levels to be ready to change their strategy.

For key, exact stainless price drivers and trends, log in or sign up below!

For full access to this MetalMiner membership content:
Log In |

While many nickel producers were anticipating the Indonesian export ban would support price increases2016-annual-buyers-guide this year, the reality was much different. Philippine suppliers’ alternative supply led to nickel prices dropping more sharply than other metals this year.

We’ve identified the main price drivers for nickel next year as:

1. China GDP & PMI Data

2. Dollar to Euro exchange rate

3. Philippine exports

For a long-term industrial buying strategy for nickel, complete with specific support and resistance levels, download your complimentary copy of our 2016 Annual Metals Outlook report!

This report also includes commodities markets and industrial metals market analysis, in addition to key price drivers and commentary on aluminum, nickel, lead, zinc, tin and various forms of steel, in addition to copper.

We wrote last week about the selective benefit of lower power costs to certain metals, notably aluminum and zinc spring to mind due to the large percentage of the production cost that is made up of power in the refining process.

Free Sample Report: Our Annual Metal Buying Outlook

Another metal that should be benefiting hugely at present is ferrochrome, but, unfortunately for producers, lower power costs are not a universal phenomena and major producers such as South Africa and China are still facing either restricted power supply or higher electricity costs.

Melt Shop Production Down

Meanwhile, the International Stainless Forum released figures recently for the first half of 2015 showing that at 21.1 million metric tons of stainless melt shop production global output fell 0.7% from a year earlier mainly due to a drop in Europe, Africa and all of Asia except China. Read more


A Philippine nickel miner to offer IPO despite falling prices.

Nickel prices continue to drop, due mostly in part to weak demand from top consumer China, but that isn’t stopping one Philippine nickel miner from pursuing an initial public offering.

TVI Resource Development (Phils) Inc plans an IPO to raise as much as $22 million to fund a domestic gold and silver mining pursuit, according to a recent report from Reuters.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!

Come Dec. 18, the Philippine miner, which Canadian miner TVI Pacific Inc holds a 31% equity interest in, will seek a listing on the Philippine Stock Exchange. The timing here is peculiar as Philippine nickel miner shares have suffered this year following an exemplary performance in 2014. Fellow miner Global Ferronickel Holdings Inc has held off on its IPO due to its stock price falling nearly 60% this year on nickel’s struggles.

That’s not stopping TVI Resource Development, however. The plan is to sell up to 272.02 million shares for the IPO, leading to a potential $22 million in earnings with a secondary offering potentially leading to $11 million in earnings, Reuters reported.

Will Nickel go the Way of Zinc and Lead?

A bearish market for base metals has been the story for the latter part of 2015. Nickel has notably suffered, as have zinc and lead, but the story for the latter two has changed in recent days. Zinc and lead, which are mined together, rose sharply last week on the heels of Glencore‘s announcement it will cut its annual zinc production by one third.

How will nickel fare for the remainder of 2015 and into 2016? You can find a more in-depth nickel price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

The monthly Stainless MMI® registered a value of 59 in October, flat from last month.

Free Sample Report: Our Monthly Metal Buying Outlook

Most base metal prices stabilized this month and nickel was exception. The metal is finding support just above its 2008 lows. Nickel is the metal closest to its recession level. This level could act as a psychological support level for traders, helping support prices in the coming months. However, we suspect this won’t be enough to hold prices longer-term if bad news keeps coming out of China.

China is still producing more than it can absorb. Weak Chinese demand and the fear that the worst has yet to come remains the overriding theme for nickel. Price-related closures in the nickel industry have been frequent over the past few months. However, as we’ve been pointing out, it’s hard to determine how many more mine closures we will need to see before prices find that elusive floor.

Stainless_Chart_October-2015_FNLBesides weak demand, investors remain worried about the high level of visible inventories. Not that inventory levels are a good price indicator but, for what it’s worth, inventories today are way higher than what they were when nickel bottomed out after the recession. Today’s LME nickel inventory levels appear closer to 450,000 metric tons, still near their all-time high of last June, while in 2008 nickel stocks fell below 60,000 mt.

Free Download: Latest Metal Price Trends in the MMI Report

The inventory picture looks similar in the stainless market. Domestic and import mill inventories remain high, with domestic mill lead times remaining short. With inventory well-stocked and the end of the year approaching, service centers will keep trying to reduce inventories, hesitant to order more than what’s absolutely necessary.

What This Means For Metal Buyers

We’ll have to wait and see if prices are able to bounce off their record lows. So far, we only see a lack of upside momentum. Nickel prices might need more than that before making a significant rally.

For this month’s key exact prices and trends, log in or sign up to be a MetalMiner member below!

For full access to this MetalMiner membership content:
Log In |

Switzerland will investigate precious metals price collusion and Horizonte Metals is the first buyer in Glencore‘s mining assets sell-off.

WEKO Wants Precious Probe

Switzerland’s WEKO, a government watchdog group, said on Monday it had opened an investigation into possible manipulation of the precious metals market by several major banks. Its investigation, the result of a preliminary probe, was looking at possible collusion of bid/ask spreads in precious metals markets by UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui.

Free Sample Report: Our Monthly Metal Buying Outlook

The move comes a month after press reports that the European Union’s competition regulator was investigating anti-competitive behavior in precious metals spot trading, and follows news of a US probe by the Department of Justice and the Commodity Futures Trading Commission earlier this year.

Horizonte Buys Glencore Nickel Mine

Horizonte Minerals said on Monday it has bought Glencore’s Araguaia nickel project in Brazil for $8 million.

Free Download: Latest Metal Price Trends in the September MMI Report

“This is a game-changing transaction for Horizonte. We have been able to negotiate a unique transaction leveraging the current depressed commodity markets,” Horizonte CEO Jeremy Martin said in a statement.

October Metal Price Forecast Preview Webinar

Get your short- and medium-term buying outlook for the metals you source!

Get it right from the subject matter expert’s mouth. Will China halt aluminum exports? Have we seen the low-point of the market and should you begin to buy forward? Register for our webinar on Wednesday, September 30 at 1 p.m. CDT and learn:

  • The fundamental drivers of metal prices
  • Various macroeconomic factors at play
  • Where we envision prices heading in October and into 2016

We’ll equip you with the tools you’ll need to go to your team with an informed purchasing opinion, whether you source aluminum, copper, tin, nickel, lead, zinc or the various forms of steel. This webinar is specifically tailored for the North American Manufacturer and is not to be missed!

Register today


Get your short- and medium-term outlook for nickel!

While nickel prices started September near 2009 lows, there have been signs of promise for the metal as various global factors, including Indonesia’s decision to continue to ban unprocessed ores, could lead to a price hike as the month draws to a close.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!

Nickel producers face a unique dilemma with many reluctant to put their stock on the market due in part to both near-historic low prices and an oversupply in the market. However, the supply is expected to decrease this year and while this is a positive sign, it is offset by an overflow with demand down sharply in Q3. The situation in China has not helped matters either with many steelmakers wary of increasing their consumption.

So what does the future have in store for nickel? That depends on several factors: first, a sustained recovery from China, which would bring back demand in a major way and second, continued ore prohibition from Indonesia, which would suppress supply and enable the little guys to meet the demands from behemoths such as China and Japan.

Never Predict in a Volatile Market

Nickel and other base metals are currently in the throes of a bearish yet volatile market. In situations such as these, it is best to not think about predictions but instead have a well-thought out strategy in place that can move easily based on new market signals.

You can find a more in-depth nickel price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: