Nickel Surging After Vale, Glencore Xstrata Cut Mine Production

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Nickel surged 6 percent to a two-year high today on news of a mine shutdown in New Caledonia and positive trade data from China.

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The Financial Times reported that nickel supply concerns were accentuated when Vale suspended work at its Goro operations on the Pacific archipelago of New Caledonia due to a spill. The mine had been expected to produce about 40,000 tons of nickel this year, out of a total worldwide production of about 2 million tons. Earlier this week Glencore Xtrata said output at its Koniambo mine, also in New Caledonia, had been disappointing, and that its 26,000-ton production forecast for this year was being reviewed.

Data from China that showed exports unexpectedly increasing in April further supported nickel.

At $18,520 per metric ton, the nickel 3-month price moved up 1.6 percent on Wednesday, May 7, making it the day’s biggest mover on the LME. On the LME, the nickel spot price rose 1.5 percent to $18,450 per metric ton. The cash price of primary Indian nickel saw a 0.4 percent decline to INR 1,125 ($18.75) per kilogram.

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Chinese stainless steel prices were flat for the day. For the fifth day in a row, the price of Chinese ferro-chrome remained essentially flat at CNY 8,300 ($1,333) per metric ton. For the fifth consecutive day, the price of Chinese ferro-moly held flat at CNY 145,000 ($23,293) per metric ton.

The Allegheny Ludlum 316 stainless surcharge saw little movement at $1.16 per pound. The price of Chinese 316 stainless coil continues hovering around CNY 26,000 ($4,177) per metric ton for the fifth day in a row. For the fifth day in a row, the price of Chinese 304 stainless coil remained essentially flat at CNY 16,400 ($2,635) per metric ton. The price of Chinese 316 stainless steel scrap remained essentially flat at CNY 16,100 ($2,586) per metric ton. The price of Chinese 304 stainless steel scrap held steady at CNY 16,400 ($2,635) per metric ton.

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