Nickel has been in the throes of a long bear market, but there are reasons to be optimistic about a price bounceback for this industrial metal.

According to a recent report from the Financial Times, demand from China and the electric car battery market heating up could spur a nickel price boost in the coming months.

However, investors should still exercise caution.

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“True, there are plenty of negatives out there,” writes Alan Livsey for the Financial Times. “Supply growth from smelters in China and Indonesia has yet to abate. Forced destocking from end users and traders has made matters worse. Goldman Sachs expects net supply growth will nearly triple in 2018 from the estimated 37,000 tonnes this year.”

Livsey added if supply can be curtailed and demand grows as projected, nickel’s once low reputation with investors could see a significant change in direction.

Are Commodities as a Whole ‘Losing their Roar’?

Our own Irene Martinez Canorea recently wrote how June has not been particularly kind to metal producers, beginning with the U.S. Federal Reserve spiking interest rates up by 0.25%.

She writes: “The most recent Fed rate hike breathed a little life into the dollar, which has fallen for most of this year. We believe this could have a direct impact on the metals industry — namely, causing prices to fall.”

How will nickel and base metals fare in 2017? You can find a more in-depth nickel price forecast and outlook in our brand-new Monthly Metal Buying Outlook report.

For a short- and long-term buying strategy with specific price thresholds:

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The International Lead and Zinc Study Group (ILZSG) released preliminary data for this year, which showed the global market for refined zinc metal was in deficit during the first four months of the year. Total reported zinc inventories also declined during that time.

The ILZSG report stated that world zinc mine production grew 7.3% for the first four months of 2017 compared to the same time last year, mostly due to increased output in China, India, Peru, Turkey and Eritrea.

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Furthermore, growth in refined zinc metal production in France, Kazakhstan and India were offset by reductions in Peru, Canada and the Republic of Korea, leading to an overall worldwide increase of 1.6%.

Worldwide refined zinc metal demand grew 3.7% during this time frame, mostly due to a 42.9% recovery in apparent usage in the U.S.

China’s Effect on Zinc Prices

The ILZSG report stated: “China imported a total of 385kt of zinc contained in zinc concentrates, an increase of 58kt compared to the same period of 2016. Chinese net imports of refined zinc metal amounted to 99kt, a decrease of 114kt.”

How will zinc and base metals fare in 2017? You can find a more in-depth zinc price forecast and outlook in our brand-new Monthly Metal Buying Outlook report.

For a short- and long-term buying strategy with specific price thresholds:

Macro photo of a piece of lead ore

The International Lead and Zinc Study Group (ILZSG) released its findings for June, showing global refined lead metal demand exceeded supply during the first four months of the year.

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In addition, the ILZSG report revealed total reported stock levels increased during that same time frame. An increase in worldwide lead mine production, to the tune of 13% year-over-year (compared to the first four months of 2016), is primarily the result of increased production in China.

Furthermore, a global refined lead metal output increase of 8.4% can be attributed to India, China and the United States.

The ILZSG report states: “A sharp rise in net imports was the main influence on an increase in US apparent demand of 22.8%. There was also a strong rise in Chinese apparent usage of 16.4%. European demand increased by a more modest 1.5% with overall global demand up by 11.15%.”

How will lead and base metals fare in 2017? You can find a more in-depth lead price forecast and outlook in our brand-new Monthly Metal Buying Outlook report.

For a short- and long-term buying strategy with specific price thresholds:

Tin prices continue to suffer with Chinese competition and Shanghai trading counteracting limited supply on the London Metal Exchange (LME).

Generally speaking, limited supply of a commodity should translate to a rise in price — this has not been the case for tin.

In a recent opinion piece for Bloomberg, Shelley Goldberg, founder and principal at Invest-with-Purpose, writes that despite tin inventory at LME warehouses reaching 20-year lows, prices are also down, to the tune of more than 5% since the start of the year.

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The reason? Goldberg writes that exchange trading competition from China is to blame.

Goldberg writes: “Low inventory levels have also historically resulted in an increase in both volume and open interest; however, for LME tin they have been falling, too. Average LME daily tin volumes this year slipped by 14 percent from January to April, compared with the same period a year earlier. On an annual basis they fell 7 percent in 2016 and 31 percent in 2015. Open interest has also been declining, totaling 16,152 lots at the end of April, compared with 22,563 lots a year earlier.”

Reconciling the SFE and LME

She added that LME is no longer the exclusive exchange for data and information on the metals markets, as the Shanghai Futures Exchange is now challenging its monopoly.

Goldberg concludes: “The bottom line is that attempting to arbitrage LME and Shanghai tin is not as easy as it may seem (different currencies, contract sizes, terms, and so on). But suffice it to say, assessing the tin markets from a more global perspective will undoubtedly provide a better perspective not only on the tin market, but on the world’s economy.”

How will tin fare in 2017? You can find a more in-depth tin price forecast and outlook in our brand-new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

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Copper prices rallied late last week on the heels of severe weather striking several South American mines, as well as labor issues cropping up in Indonesia.

According to a report from MarketWatch, copper prices climbed 1.12% to $5,688 per metric ton on the London Metal Exchange last Thursday morning.

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Copper had previously opened the month on the low end, but unexpected weather and labor issues quickly reversed that trend:

“Those mine disruptions in Chile are the major supply-side news this week,” BOCI Global Commodities’s Xiao Fu told the news source.

In China, import data revealed an 8.5% month-over-month increase in refined copper imports.

“That increase is a fairly substantial one and is helping prices rebound after being beaten up over the past few weeks,” ETF Securities strategist Nitesh Shah told the news source.

Copper Prices Affected by Chinese Demand

The MetalMiner Copper MMI remained steady in June. Writes our own Irene Martinez Canorea:

“Currently, copper prices are directly affected by Chinese demand, as well as by uncertainty in supply. This downtrend in copper prices might be just a brief pause in a dynamic market. Thus, copper-buying organizations should watch the market closely, looking for a possible uptrend that would show a recovery.”

How will copper and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand-new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

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Aluminum exports from Qatar hit a roadblock, and it could be some time before the situation is resolved.

According to a recent Reuters report, Egypt, Saudi Arabia, Bahrain and the United Arab Emirates cut ties with Qatar, leading to an aluminum manufacturing plant, partly owned by Norway’s Norsk Hydro, to seek other routes for export.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!

The reason for top Arab nations breaking ties with Qatar? Alleged support of Islamic militants, which Qatar denies.

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Last week, Lisa Reisman (CEO, Azul Partners; Executive Editor, MetalMiner) sat down with Ron Wilson (CPO, Wilbur Curtis) and Bill DeMartino (General Manager, North American Operations, riskmethods) to discuss how metal-buying organizations are staying smart on risk. It made for a engaging conversation around risk management processes and strategy, and provided manufacturers of all sizes with a comprehensive risk management go-forward plan.

Although the live event experienced some unforeseen technical difficulties, MetalMiner is pleased to present the clean recording of Reisman’s discussion with Wilson and DeMartino. You can view the presentation by clicking the link below:

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European steelmakers are coming together to fight a common enemy: EU carbon reforms.

According to a recent report from Reuters, steelmakers across the continent are writing EU leaders, emphasizing they not burden the industry with what they feel are superfluous carbon emission regulation costs. Such costs, they argue, would put them at a competitive disadvantage with their global peers as well as increase the risk of job cuts and plant closures.

“You can avoid burdening the sector with high costs that will constrict investment, or that will increase the risk of job losses and plant closures in the EU,” the CEOs say in an open letter, obtained by Reuters, dated May 28, to EU heads of state and government.

Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!

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Nickel, along with zinc, could see a boost on the heels of the Chinese government cracking down on the steel industry.

According to a recent report from Reuters, nickel and zinc prices reached their highest point in more than two weeks with China cutting down on production of both metals.

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“The Chinese government is becoming quite aggressive in targeting environmental problems,” Oxford Economics commodities analyst Dan Smith told Reuters.

With supply in China in question, industrial demand for nickel continues to gain momentum, pushing prices for the metal up, along with prices of aluminum and zinc, according to a recent report from the Economic Times.

On the Multi Commodity Exchange, nickel for delivery in May rose by 0.6%, the Economic Times report stated.

Nickel Price Forecast for 2017

Nickel prices at future trade are also being supported by a boost in demand from alloy producers in the spot market, according to the news source.

How will nickel and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

AdobeStock/Pavel Losevsky

Beijing’s focus on supply-side reforms of China’s giant aluminum industry has been a prime mover for the metal price this year.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

But primary metal price rises aside, of more concern to aluminum consumers should be the nature and extent of China’s aluminum semi-finished product exports. There have been various facets to China’s product exports, as Andy Home of Reuters succinctly explained in an article last week.

On the one hand, the growing volume of product exports has ignited considerable trade tensions with the U.S. and Europe. In the case of the former, the article reports, it led to a formal complaint to the World Trade Organization (WTO) and, more recently, a Section 232(b) investigation under the Trump administration. In Europe, expiring duties have been rolled over on imports of aluminum wheels from China and further action sought by trade bodies on a range of aluminum products.

Meanwhile, rumours that an indeterminate but significant proportion of China’s semi-finished product exports were in fact primary metal being illegally classified as semi-finished product to circumvent export duties on unwrought aluminum have at least partially been vindicated, as a focus has been brought to bear on a massive stock of aluminum held in Mexico last year that appeared to originate from Vietnam but with links to China.

Home explained that China’s exports of commodity code 7604 (bars rods and extruded profiles) have mushroomed from just over 6,000 tons in 2012/2013 to 463,000 tons in 2015 and 510,000 tons in 2016. Some of that metal appeared in Mexico last year before media attention encouraged the metal to be recycled back to an obscure port in Vietnam. Read more