Morgan Stanley: Nickel, Industrial Metals Will Benefit From Chinese Easing Measures

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Industrial metals will probably be the greatest beneficiaries of China’s intensifying policy-easing measures in the third quarter, according to Morgan Stanley.

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Economic growth in China is set to improve, helped by easing and stronger export markets, metals analysts including Joel Crane wrote in a report today, citing the bank’s chief economist for China, Helen Qiao, as reported by Bloomberg News.

The LMEX Index of the six main metals traded on the London Metal Exchange has risen 3 percent this year. Beijing will step up policy-easing measures this quarter to counter potential property market weakness and strengthen growth momentum, Morgan Stanley said.

The spot price of nickel saw a 1.1 percent drop on the LME on Tuesday, July 8, landing at $19,175 per metric ton and making it the biggest mover of the day. On the LME, the 3-month price of nickel fell 0.9 percent to $19,275 per metric ton. After falling for two days, the cash price of primary Indian nickel rose 0.3 percent to INR 1,168 ($19.49) 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 ($1,338) per metric ton. The price of Chinese ferro-moly was unchanged at CNY 145,000 ($23,370) per metric ton.

The Allegheny Ludlum 316 stainless surcharge saw essentially no change for the fifth day in a row, remaining around $1.31 per pound. For the fifth consecutive day, the price of Chinese 316 stainless coil held flat at CNY 26,000 ($4,190) per metric ton. The price of Chinese 304 stainless coil held steady at CNY 16,400 ($2,643) per metric ton. The price of Chinese 316 stainless steel scrap remained essentially flat at CNY 16,100 ($2,595) per metric ton. The price of Chinese 304 stainless steel scrap saw little movement at CNY 16,400 ($2,643) per metric ton.

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