Citi Convinced Nickel Will Rise More

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Nickel’s run may have cooled down in the past week, but Citi is convinced the metal’s rise is far from over and that it will bounce back quickly, the Sydney Morning-Herald reported.

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The investment bank has forecast nickel to surge 50 percent, hitting more than $30,000 a ton next year, reaching prices not seen since mid-2008.

Nickel has slumped nearly 10 percent since last week hitting $21,625 a ton amid investor concerns that its price moved too far and too quick after rallying about 54 percent since January. Overnight, the price slipped 1.4 percent. Citi analyst Matthew Schembri said further corrections may come in the coming months as North America and Europe wind back stainless steel production, but they would not be severe and cannot outpace the fundamental price strength of the alloying metal.

On Thursday, May 22, the day’s biggest mover was the nickel spot price, which saw a 1.4 percent decline on the LME to $19,400 per metric ton. The 3-month price of nickel weakened by 0.9 percent on the LME, settling at $19,450 per metric ton. The Indian nickel cash price saw little price change yesterday at INR 1,163 ($19.83) per kilogram.

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Chinese stainless steel closed mixed yesterday. The price of Chinese ferro-chrome saw little movement at CNY 8,300 ($1,331) per metric ton. For the fifth day in a row, the price of Chinese ferro-moly remained essentially flat at CNY 145,000 ($23,255) per metric ton.

The price of Chinese primary nickel rose 1.2 percent to CNY 139,000 ($22,293) per metric ton. The Allegheny Ludlum 316 stainless surcharge held steady at $1.16 per pound. The price of Chinese 316 stainless coil saw essentially no change for the fifth day in a row, remaining around CNY 26,000 ($4,170) per metric ton. For the fifth consecutive day, the price of Chinese 304 stainless coil held flat at CNY 16,400 ($2,630) per metric ton. The price of Chinese 316 stainless steel scrap continues hovering around CNY 16,100 ($2,582) per metric ton for the fifth day in a row.

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