Nickel Might Be Back in Balance, According to Norilsk

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Record nickel stockpiles monitored by the London Metal Exchange mask a balanced market as supplies shifted from China after a financing scandal, according to Norilsk Nickel, the world’s largest producer.

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As much as 100,000 metric tons of the industrial metal may have been shipped to LME warehouses after banks tightened rules on loan collateral, according to Anton Berlin, head of strategic marketing at Norilsk. Lenders stopped accepting warrants from China after Qingdao port warehouses issued documents backed by more metal than they held.

Nickel prices have fallen 24%  from this year’s peak in May, with metal stockpiles monitored by the LME jumping 30% from the end of that month to a record 368,364 metric tons. China started investigating Qingdao in June, people with knowledge of the situation said at the time.

The Indian nickel cash price experienced the biggest price decline of the day, dropping 0.7% to close at INR 1,021 ($16.66) per kilogram on Friday, October 10. On the LME, the spot price of nickel declined 0.4% to $16,625 per metric ton. On the LME, the 3-month price of nickel fell 0.3% to $16,700 per metric ton.

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Chinese stainless steel prices were flat for the day. The price of Chinese ferro-chrome saw little movement at CNY 8,300 ($1,351) per metric ton. The price of Chinese ferro-moly held steady at CNY 145,000 ($23,609) per metric ton.

The Allegheny Ludlum 316 stainless surcharge remained essentially flat at $1.25 per pound. The price of Chinese 316 stainless coil saw essentially no change for the fifth day in a row, remaining around CNY 26,000 ($4,233) per metric ton. The price of Chinese 304 stainless coil was unchanged at CNY 16,400 ($2,670) per metric ton. For the fifth day in a row, the price of Chinese 316 stainless steel scrap remained essentially flat at CNY 16,100 ($2,621) per metric ton. For the fifth consecutive day, the price of Chinese 304 stainless steel scrap held flat at CNY 16,400 ($2,670) per metric ton.

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