Nickel Down on LME, Still the Ideal Time for BHP Billiton to Divest

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While nickel prices saw a pullback last week after surging above $21,000 a ton, prices are still up sharply for the year. More importantly, prices are expected to further strengthen as Indonesia has not shown any intention of lifting the ban on exports.

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Strong nickel prices will help BHP Billiton, which is looking to offload its nickel assets, according to the Motley Fool. BHP Billiton has said in the past that it wants to focus on its core business, which includes iron ore, copper, petroleum, coal, and possibly potash. BHP has already exited a number of non-core businesses, and earlier this month, the company said that was reviewing options for its Nickel West business. This doesn’t come as a surprise as the surge in nickel prices has made it an ideal time for the company to offload its nickel assets.

BHP’s Western Australian Nickel West business includes three mines: the Mt. Keith, Cliffs, and Leinster. The business also includes the Kalgoorlie smelter, Kambalda concentrator, and the Kwinana refinery. The company said that it is considering all options for Nickel West, including a possible sale. According to analysts at Investec, the business could fetch the Australian miner as much as $700 million.

On Wednesday, May 21, the day’s biggest mover was the 3-month price of nickel, which saw a 0.8 percent decline on the LME to $19,630 per metric ton. Following two days of rising prices, the cash price of primary Indian nickel dropped 0.7 percent to INR 1,162 ($19.84) per kilogram. The spot price of nickel closed at $19,675 per metric ton. Following a couple days of improvement, prices fell by 0.5 percent on the LME.

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Chinese stainless steel closed mixed on Wednesday. The price of Chinese ferro-chrome remained essentially flat at CNY 8,300 ($1,331) per metric ton. The price of Chinese ferro-moly held steady at CNY 145,000 ($23,246) per metric ton.

The price of Chinese primary nickel gained 0.5 percent to finish at CNY 137,400 ($22,027) per metric ton. The Allegheny Ludlum 316 stainless surcharge saw little movement at $1.16 per pound. For the fifth day in a row, the price of Chinese 316 stainless coil remained essentially flat at CNY 26,000 ($4,168) per metric ton. For the fifth consecutive day, the price of Chinese 304 stainless coil held flat at CNY 16,400 ($2,629) per metric ton. The price of Chinese 316 stainless steel scrap was unchanged at CNY 16,100 ($2,581) per metric ton.

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