Goldman Sachs Predicts A Nickel Deficit Next Year

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Goldman Sachs Group has raised its price forecast for nickel as the market is swinging to a deficit next year following an ore-export ban in Indonesia, Bloomberg News reported.

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The bank’s 12-month estimate is now $22,000 a metric ton, up 38 percent from the previous projection of $16,000, analysts led by Max Layton wrote in a report. They increased zinc and aluminum by at least 11 percent to $2,500 a ton and $2,100 a ton, respectively, saying iron ore, gold and copper have “the greatest downside” among the mining commodities.

Goldman joins Morgan Stanley and Citigroup Inc. in boosting the outlook for nickel, already the best-performing base metal on the London Metal Exchange this year, as supplies are declining after the Indonesian restriction in January. The global nickel market will be in deficit of 201,000 tons next year from an estimated 20,000 ton surplus this year, with demand exceeding supply for aluminum and zinc this year, Goldman said.

On Wednesday, July 23, the day’s biggest mover was the spot price of nickel, which saw a 1.1 percent increase on the LME to $18,920 per metric ton. On the LME, the nickel 3-month price inched up 0.5 percent to $18,975 per metric ton. At INR 1,146 ($19.06), the cash price of primary Indian nickel finished the market day up 0.3 percent per kilogram.

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Chinese stainless steel prices closed flat for the day. For the fifth consecutive day, the price of Chinese ferro-chrome held flat at CNY 8,300 ($1,338) per metric ton. The price of Chinese ferro-moly remained essentially flat at CNY 145,000 ($23,374) per metric ton.

The Allegheny Ludlum 316 stainless surcharge saw little movement at $1.31 per pound. The price of Chinese 316 stainless coil continues hovering around CNY 26,000 ($4,191) per metric ton for the fifth day in a row. The price of Chinese 304 stainless coil saw essentially no change for the fifth day in a row, remaining around CNY 16,400 ($2,644) per metric ton. The price of Chinese 316 stainless steel scrap was unchanged at CNY 16,100 ($2,595) per metric ton. For the fifth consecutive day, the price of Chinese 304 stainless steel scrap held flat at CNY 16,400 ($2,644) per metric ton.

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