Nickel’s Roller Coaster Reaches Lowest LME Trough Since March

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Nickel prices have sunk to their lowest level since March, as slowing economies in Europe and China rattle investors, while a financing scandal in China has prompted companies to dump tons of nickel and other metals on the market.

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The slide extends this year’s roller-coaster ride for traders in the metal, which is used to produce stainless and heat-resisting steel. Nickel futures have tumbled more than 20% since early September.The market has also seen an influx of supply as trading companies sell stockpiles used to back loans following a financing scandal at Chinese ports. Banks have tightened credit for loans backed by industrial metals in the wake of allegations that traders at the ports of Qingdao and Penglai fraudulently used the same stockpiles of metal as collateral to secure multiple loans. As a result, investors have sold holdings to repay debts or to reduce their stockpiles, the Wall Street Journal reported.

The Indian nickel cash price saw the biggest decline of the day, dropping 3.3% to close at INR 940.20 ($15.34) per kilogram on Tuesday, October 21. On the LME, the nickel spot price fell 1.2% to $15,310 per metric ton. The 3-month price of nickel weakened by 1.2% on the LME, settling at $15,385 per metric ton.

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Chinese stainless steel prices were 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 remained essentially flat at CNY 145,000 ($23,609) per metric ton.

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