Nickel for our thoughts? Sure! An exact nickel price forecast isn’t necessary to make the most effective purchasing decisions – in fact, it may be dangerous.
By analyzing and understanding these price drivers, buyers will be ready to react when the market gives clear signs that a new uptrend is developing and stay hedged as long as the trend is in place – until there is evidence that the trend is over.
Below is an excerpt from our recent report, “2015 Metal Buying Outlook: What Can We Expect for Base Metal and Steel Prices Over the Next 12 Months?”
(Remember that the state of nickel and its prices fluctuate from month-to-month. For the most recent look at how this metal is faring, please consult our Monthly Metal Buying Outlook).
MetalMiner’s Nickel Price Outlook 2015
Nickel was the first base metal to turn up this year. We recommended that our members start hedging nickel in the first quarter when prices were rising rapidly.
Prices have fallen significantly since September, but this move is not that strange considering that nickel is still up for the year overall. If we look back, we didn’t see nickel come back up after sharp declines like this one during 2009-2011. Moreover, we haven’t seen heavy trading volume in this decline, which might mean that the decline is not as serious as it seems and might be due for a recovery.
Analysts and market observers could take fundamentally different perspectives. On one side, some could argue that the shortage is not as bad as expected, as China’s imports remain strong and LME inventory levels are at high levels. On the other hand, some could argue that half of the ore that China stockpiled before the Indonesian nickel ore ban is already gone and that inventories are just flowing from non-transparent to transparent warehouses. In either case, it wouldn’t be the first time that we see prices rising while inventory levels are high.
In our view, nickel deserves some credit and unless nickel falls below January 2014 price levels*, we recommend buyers remain hedged. The metal’s upside potential seems limited until the commodities market recovers, but we expect prices to remain supported and perhaps going higher in 2015.
* What will be the new price target to keep your eye on if/when the nickel market suddenly whipsaws? Exact price thresholds are updated every month in MetalMiner’s monthly nickel forecast (you can even learn about support and resistance levels…) – start your free trial.
Or if you buy other metals, download the complete report by filling out the form below: