Trying to Reason With Monsoon Season: Philippine Nickel Ore Drying Up, Prices Up

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London nickel climbed to a 5-week top on Friday, on track for its biggest weekly gain since early May, as Chinese stainless steel mills used up ore stockpiles amid a disruption in supplies from the Philippines.

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China’s mills have been supplementing their nickel ore stocks with shipments from the Philippines after Indonesia, formerly China’s top supplier, banned exports in January. But the Philippine monsoon season from November to January has started denting its overseas sales.

“There are indications in China that material from the Philippines is drying up because of the monsoon. If true, you’d expect that to start to tighten things with the NPI guys,” Lachlan Shaw, an analyst with Commonwealth Bank in Melbourne, told CNBC.

The Indian nickel cash price saw the biggest upwards shift for the day, rising 4.9% to close at INR 1,023 ($16.50) per kilogram on Thursday, November 20. On the LME, the nickel spot price inched up 1.3% to $15,845 per metric ton. On the LME, the nickel 3-month price rose 1.3% to $15,900 per metric ton.

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Chinese stainless steel closed mixed yesterday. The price of Chinese ferro-chrome was unchanged at CNY 8,300 ($1,356) per metric ton. The price of Chinese ferro-moly remained essentially flat at CNY 145,000 ($23,695) per metric ton.

The price of Chinese primary nickel jumped 4.1% to finish at CNY 111,200 ($18,172) per metric ton. For the fifth consecutive day, the Allegheny Ludlum 316 stainless surcharge held flat at $1.06 per pound. The price of Chinese 316 stainless coil was unchanged at CNY 26,000 ($4,249) per metric ton. The price of Chinese 304 stainless coil held steady at CNY 16,400 ($2,680) per metric ton. Chinese 316 stainless steel scrap saw little change in its price yesterday at CNY 31,500 ($5,148) per metric ton.

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