Morgan Stanley Sees Nickel Oversupply, While Others See Rally

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The nickel market is garnering some interesting attention. “The nickel market remains oversupplied and prices will hover near current levels, according to a report by Morgan Stanley today that contrasts with forecasts from Citigroup Inc. and Goldman Sachs Group Inc. for a rally,” reports Bloomberg Businessweek.

“Prices for the metal used in stainless steel production will stay close to current spot levels in 2014 unless there is both a sustained pick-up in global steel demand and more supply-side production discipline, Morgan Stanley analysts Peter Richardson and Joel Crane wrote in a report today. This compares with Goldman raising its 12-month price target to $16,000 per metric ton from $15,000 yesterday.”

“Insufficient global output cuts will contain prices amid expected production ramp-ups at mines this year and as miners seek lower costs by producing more material, according to the Morgan Stanley report. Goldman analysts saw a potential shortage by the end of 2014 following the Indonesian ban. Nickel has climbed 6.3 percent this year, the most among the six main metals traded on the London Metal Exchange.”

In metal price news for stainless steel and nickel…

On Tuesday, January 21, the day’s biggest mover was the nickel spot price, which saw a 1.1 percent decline on the LME to $14,430 per metric ton. The 3-month price of nickel closed at $14,475 per metric ton. Following a couple days of improvement, the metal’s price weakened by 1.0 percent on the LME. The cash price of primary Indian nickel weakened by 1.0 percent.

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Chinese stainless steel closed mixed yesterday. The price of Chinese ferro-chrome continues to hover for the fifth day in a row. For the fifth day in a row, the price of Chinese ferro-moly remained essentially flat.

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The price of Chinese primary nickel saw a 1.1 percent decline. The price of Chinese 316 stainless coil saw little movement. The price of Chinese 304 stainless coil was unchanged. The price of Chinese 316 stainless steel scrap saw essentially no change for the fifth day in a row. The price of Chinese 304 stainless steel scrap remained essentially flat.