Goldman-Sachs: Drop in Nickel Pig-Iron Will Bring Prices Up

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Nickel prices on the London Metal Exchange may advance on slower stockpile building as output of a lower-grade alternative drops in the coming months, according to Goldman Sachs Group.

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Nickel pig iron output cuts are likely at current prices and could balance the market, the bank’s analysts wrote in a report dated yesterday. The Philippine monsoon season will cut supply, boosting ore prices and the production cost of nickel pig iron, or NPI, through February, according to the analysts.

“A slowdown in LME nickel stock builds is likely to be necessary to see nickel rally significantly from current prices,” the bank said in the report. “We expect this will occur as NPI production cuts feed through, and as we believe China’s destocking is nearing an end.”

On Wednesday, October 29, the day’s biggest mover was the cash price of primary Indian nickel, which saw a 6.6% increase to INR 970.50 ($15.83) per kilogram. This increase comes after the price fell for the two previous days. On the LME, the nickel spot price rose 2.9% to $15,050 per metric ton. On the LME, the nickel 3-month price gained 2.4% to finish at $15,130 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 ($1,351) per metric ton. For the fifth consecutive day, the price of Chinese ferro-moly held flat at CNY 145,000 ($23,609) per metric ton.

The Allegheny Ludlum 316 stainless surcharge saw little price change on Wednesday at $1.06 per pound. The price of Chinese 316 stainless coil was unchanged at CNY 26,000 ($4,233) per metric ton. For the fifth consecutive day, the price of Chinese 304 stainless coil held flat 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. The price of Chinese 304 stainless steel scrap saw essentially no change for the fifth day in a row, remaining around CNY 16,400 ($2,670) per metric ton.

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