Nickel Prices Plummet, There May Be No Ore Shortage at All

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Reuters’ Andy Home writes that Chinese trade figures for August showed imports of just 39,000 tons of nickel ore, very much in line with the previous 3 months. This material is, in all likelihood, iron ore with a high nickel content that China’s customs department has misclassified.

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Moreover, the latest figures from the International Nickel Study Group show Indonesian mined nickel output collapsing to 138,000 tons in the January-July period from 421,000 tons a year earlier.

Indonesian production and Chinese import figures confirm the seismic changes under way in Indonesia, which is using its raw ore export ban to force its mining sector down the value-added route of processing.

However, what is surprising, Home writes, is the volume of material now flowing to China from the Philippines. It was widely expected that Chinese imports from the Philippines would rise after the Indonesian ban as NPI players attempted to diversify their sourcing of raw materials.

Imports of ore from the Philippines topped 5 million tons in August for the second month running. Indeed, August’s tally of 5.33 million tons marked an all-time high with cumulative imports in 2014 now up 26 percent at 22.61 million tons. The figures now match peak volumes from Indonesia prior to the implementation of the ban at the start of this year, causing analysts to do a collective double-take on a country that had been viewed as a second-tier supplier.

The day’s biggest mover was the cash price of primary Indian nickel which dropped by 4.6 percent on Tuesday, September 23 to close at INR 1,041 ($17.06) per kilogram. At $17,070 per metric ton, the nickel spot price on the LME was down 3.8 percent from the previous market day. On the LME, the nickel 3-month price fell 3.7 percent to $17,170 per metric ton.

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Chinese stainless steel prices closed flat for the day. The price of Chinese ferro-chrome was unchanged at CNY 8,300 ($1,352) per metric ton. For the fifth consecutive day, the price of Chinese ferro-moly held flat at CNY 145,000 ($23,616) per metric ton.

The Allegheny Ludlum 316 stainless surcharge saw little movement at $1.26 per pound. The price of Chinese 316 stainless coil held steady at CNY 26,000 ($4,235) per metric ton. For the fifth day in a row, the price of Chinese 304 stainless coil remained essentially flat at CNY 16,400 ($2,671) per metric ton. The price of Chinese 316 stainless steel scrap continues hovering around CNY 16,100 ($2,622) per metric ton for the fifth day in a row. The price of Chinese 304 stainless steel scrap remained essentially flat at CNY 16,400 ($2,671) per metric ton.

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