Nickel miners are ramping up spending on exploration for deposits of a metal used to make stainless steel and readying new investments, as the industry emerges from a prolonged slump in prices, the Wall Street Journal reported.
The change in sentiment is being driven by Indonesia’s ban on exports of unprocessed ore, which has helped push up nickel prices by 40% this year. Russia’s ongoing tensions with Ukraine have also played a part in the turnaround in nickel’s fortunes, as metals traders bet on the potential for trade sanctions that could disrupt global supply.
Higher nickel prices are strengthening companies’ cash flow, letting them to take more risk. For Australian miner Western Areas, that means spending more on exploration and scouring the sector for potential partnerships with companies which own promising projects. Russia’s Norilsk Nickel is also looking to expand after selling off its Black Swan mines in Australia to Poseidon.
On Tuesday, July 15, the 3-month price of nickel experienced the biggest change, rising 0.8 percent on the LME to $19,300 per metric ton. On the LME, the spot price of nickel inched up 0.8 percent to $19,205 per metric ton. The Indian nickel cash price saw a 0.5 percent decline to INR 1,165 ($19.40) per kilogram.
Chinese stainless steel closed mixed yesterday. The price of Chinese ferro-chrome continues hovering around CNY 8,300 ($1,337) per metric ton for the fifth day in a row. The price of Chinese ferro-moly remained essentially flat at CNY 145,000 ($23,365) per metric ton.
The price of Chinese primary nickel increased 0.4 percent to CNY 131,550 ($21,198) 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. The price of Chinese 316 stainless coil continues hovering around CNY 26,000 ($4,190) per metric ton for the fifth day in a row. For the fifth consecutive day, the price of Chinese 304 stainless coil held flat at CNY 16,400 ($2,643) per metric ton. The price of Chinese 316 stainless steel scrap saw little movement at CNY 16,100 ($2,594) per metric ton.