Surplus Equals Unrest and Fall for Nickel, Now at a 6-Month Low

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Nickel prices fell to a 6-month low as inventories monitored by the London Metal Exchange extended an increase to a record. Aluminum tumbled the most in 14 months.

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This year, nickel stockpiles have jumped 37% even as Indonesia, the world’s biggest producer of the mined metal, maintains an ore-export ban. China is the top user of the metal. Prices entered a bear market on Sept. 29, falling more than 20% from the 2014 closing high on May 13.

“Despite the Indonesian ban, imports to China were actually higher than a year ago,” Edward Meir, an analyst at INTL FCStone Inc. in New York, stold Bloomberg News. “There are record high stocks on the LME, which isn’t an indication of a tight market.”

The day’s biggest mover was the cash price of primary Indian nickel which dropped by 2.2% on Wednesday, October 1 to close at INR 1,019 ($16.46) per kilogram. On the LME, the nickel 3-month price rose 0.2% to $16,595 per metric ton. The spot price of nickel held steady yesterday on the LME, remaining around $16,500 per metric ton.

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Chinese stainless steel prices were flat for the day. The price of Chinese ferro-chrome remained essentially flat at CNY 8,300 ($1,352) per metric ton. The price of Chinese ferro-moly held steady at CNY 145,000 ($23,621) per metric ton.

The Allegheny Ludlum 316 stainless surcharge held steady around $1.25 per pound. The price of Chinese 316 stainless coil saw little movement at CNY 26,000 ($4,235) per metric ton. The price of Chinese 304 stainless coil saw essentially no change for the fifth day in a row, remaining around CNY 16,400 ($2,672) per metric ton. For the fifth consecutive day, the price of Chinese 316 stainless steel scrap held flat at CNY 16,100 ($2,623) per metric ton. The price of Chinese 304 stainless steel scrap was unchanged at CNY 16,400 ($2,672) per metric ton.

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