Weakening Australian Dollar Gives Nickel Miners There an Edge

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A weakening Australian dollar is shielding the country’s nickel miners from the full force of falling metal prices, giving them an edge over rivals with operations from the Philippines to Canada, the Wall Street Journal reported.

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Nickel, which is traded globally in US dollars, has tumbled 12% on the London Metal Exchange since the start of last month on concerns about the amount of metal piling up in warehouses. That has reversed a price rally since the start of the year, when a ban on ore exports from Indonesia prompted big consumers in China to scramble for alternative supply.

For global nickel miners, falling prices are squeezing profits and shaking investor confidence in the industry but the pain has not been as acute in Australia as a falling Aussie dollar has limited the pain.

On Monday, October 13, the day’s biggest mover was the nickel spot price, which saw a 1.9% decline on the LME to $16,305 per metric ton. The nickel 3-month price weakened by 1.8% on the LME, settling at $16,395 per metric ton. The Indian nickel cash price saw a 0.3% decline to INR 1,019 ($16.62) per kilogram.

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Chinese stainless steel prices closed flat for the day. The price of Chinese ferro-chrome continues hovering around CNY 8,300 ($1,351) per metric ton for the fifth day in a row. The price of Chinese ferro-moly saw little movement at CNY 145,000 ($23,609) per metric ton.

For the fifth consecutive day, the Allegheny Ludlum 316 stainless surcharge held flat at $1.25 per pound. For the fifth day in a row, the price of Chinese 316 stainless coil remained essentially flat at CNY 26,000 ($4,233) per metric ton. The price of Chinese 304 stainless coil held steady at CNY 16,400 ($2,670) per metric ton. The price of Chinese 316 stainless steel scrap remained essentially flat at CNY 16,100 ($2,621) per metric ton. The price of Chinese 304 stainless steel scrap was unchanged at CNY 16,400 ($2,670) per metric ton.

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