Nickel Officially in a Bear Market

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Nickel entered a bear market yesterday as stockpiles reached a record, signaling ample global supplies even as Indonesia’s export ban of the mined metal continues.

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Inventories jumped 16% since June 30 and are heading for an 11th straight quarterly gain, the longest streak since the data begins in 1979, Bloomberg News reported. The Philippines replaced Indonesia as the largest nickel-ore supplier to China, the top consumer, and shipments climbed to a record in August, the latest customs data show.

“If you look at the nickel stockpiles, those have been rocketing to much higher levels,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, told Bloomberg. “Supply is becoming less of a worry, especially as demand is being ratcheted back, particularly because of China’s economic weakness.”

On the London Metal Exchange, nickel for delivery in 3 months dropped 1.8% to settle at $16,675 a metric ton at 5:50 p.m. The decline was more than 20% lower than this year’s closing high on May 13, meeting the common definition of a bear market.

On Monday, September 29, the day’s biggest mover was the Indian nickel cash price, which saw a 10.2% decline to INR 1,038 ($16.91) per kilogram. On the LME, the 3-month price of nickel rallied to rise 0.4% after hitting its low to $17,375 per metric ton. After a 0.4% increase, the spot price of nickel finished the day on the LME at $17,270 per metric ton.

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Chinese stainless steel prices were 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 ($1,342) per metric ton. The price of Chinese ferro-moly held steady at CNY 145,000 ($23,447) per metric ton.

The Allegheny Ludlum 316 stainless surcharge saw little change in its price on Monday at $1.25 per pound. The price of Chinese 316 stainless coil was unchanged at CNY 26,000 ($4,204) per metric ton. The price of Chinese 304 stainless coil remained essentially flat at CNY 16,400 ($2,652) per metric ton. The price of Chinese 316 stainless steel scrap was unchanged at CNY 16,100 ($2,603) per metric ton. The price of Chinese 304 stainless steel scrap saw essentially no change for the fifth day in a row, remaining around CNY 16,400 ($2,652) per metric ton.

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