LME Nickel Price Weakens After China Spending Spurs Rapid Climb

Much of the recent speculation in nickel was based on the demand in China – the world’s largest user of industrial metals – and how its government might deal with its $21 trillion debt load in fiscal year 2014.

Following two days of increases on the LME, the 3-month price of nickel dropped by 1 percent Monday. The Indian nickel cash price weakened by nearly as much. Following two days of improvement, the metal’s price weakened by 0.8 percent on the LME.

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China’s leaders spurred speculation they will allow the debt mountain to further inflate after refraining from cutting their annual economic growth target on March 5.

Analysts at Australia & New Zealand Banking Group Ltd. and Nomura Holdings, Inc. said authorities will need to loosen monetary policy, after Premier Ki Keqiang announced a goal of 7.5 percent growth, the same target as last year. Li said China will seek an “appropriate” increase in credit.

Meanwhile, Chinese stainless steel closed mixed yesterday. The price of Chinese ferro-chrome saw essentially no change for the fifth day in a row. The price of Chinese ferro-moly continues hovering in a short range for the fifth day in a row.

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The price of Chinese primary nickel rose 0.5 percent. For the fifth consecutive day, the price of Chinese 316 stainless coil held flat. The price of Chinese 304 stainless coil also held steady and  the price of Chinese 316 stainless steel scrap remained essentially flat. The price of Chinese 304 stainless steel scrap was unchanged as well.

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