Nickel Bank Note Sales Hit A New Record; Price Continues to Rise

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Issuance of structured products tied to nickel have surged to a record this year after Indonesia, the biggest producer of the mined metal, banned raw-ore exports, Bloomberg News reported.

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Banks issued 198 so-called certificates linked to the material used in stainless steel in the first five months of this year, outstripping all annual totals in data compiled by Bloomberg going back to 2004. The price of the element, which is also used to make rechargeable batteries, has jumped 33.6 percent in 2014 after Southeast Asia’s largest economy instituted the ban in January to encourage local processing.

“We have seen a recent increase in interest in nickel-linked notes” due to the export ban by Indonesia and concerns that Russia will face sanctions that may affect nickel supply, Jean-Luc Jacob, head of commodity trading at DZ Bank AG, said in an e-mail to Bloomberg. The Frankfurt-based bank issues the securities to individual investors in Germany.

The cash price of primary Indian nickel rose 2.5 percent on Thursday, June 26, making it the day’s biggest mover. After two days of falling prices, it closed at INR 1,130 ($18.79) per kilogram. After a 0.7 percent increase, the spot price of nickel finished the day on the LME at $18,275 per metric ton. On the LME, the 3-month price of nickel inched up 0.5 percent to $18,350 per metric ton.

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Chinese stainless steel prices closed flat for the day. The price of Chinese ferro-chrome saw essentially no change for the fifth day in a row, remaining around CNY 8,300 ($1,331) per metric ton. The price of Chinese ferro-moly was unchanged at CNY 145,000 ($23,259) per metric ton.

The Allegheny Ludlum 316 stainless surcharge saw little movement yesterday, closing out around $1.31 per pound. The price of Chinese 316 stainless coil held steady at CNY 26,000 ($4,171) per metric ton. The price of Chinese 304 stainless coil saw essentially no change for the fifth day in a row, remaining around CNY 16,400 ($2,631) per metric ton. For the fifth day in a row, the price of Chinese 316 stainless steel scrap remained essentially flat at CNY 16,100 ($2,583) per metric ton. For the fifth consecutive day, the price of Chinese 304 stainless steel scrap held flat at CNY 16,400 ($2,631) per metric ton.

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