Tag: Nickel Pig Iron

Stainless MMI Rises 6%, Philippine Actions Trigger Bull Run

Our Stainless MMI rose to 55 points in July thanks to a recovery in nickel prices. Nickel finally climbed to five-digit territory in July, trading near $10,000 per metric ton on the London Metal Exchange, its highest level in eight months.

Two-Month Trial: Metal Buying Outlook

A factor supporting nickel prices this year is expectations of lower nickel pig-iron ore exports from the Philippines. Ore producers in the Philippines warned earlier this year that they would cut production due to low prices. So far, Chinese imports of Philippine ore fell by 27% in the first five months of the year.

Stainless_Chart_July-2016_FNL

But price momentum picked up last month following recent news that the Philippine government would review all mining operations in the country. The new President-elect, Rodrigo Duterte, ran on an anti-mining platform and could impose an Indonesian-style raw ore ban, which could potentially disrupt supplies for Chinese buyers.

New Philippine Government

In addition, the new mining minister, Regina Lopez — a committed environmentalist — provided the latest trigger for a rally after saying that there would be a ban on fresh mining exploration in the country for a month while all existing mines are being reviewed.

The expectation is that mines could potentially have their licenses revoked. At the beginning of July, the Philippines already ordered the suspension of operations at two nickel ore mines for environmental violations and the government halted the issuance of exploration permits as a nationwide crackdown led by the mining minister begins.

Nickel’s Bullish Backers

This bullish price action also follows a broad recovery in the whole metal complex this year, which gives more credibility to nickel’s bulls. Our historical analysis shows that a metal has far greater upside potential when the overall commodities market is in bullish mode, while its chances of going down increase in a falling commodities market. While we continue to see bullish sentiment in commodity markets, investors will continue to react in a bullish manner on news like potential supply cuts in the Philippines.

On the other hand, not everything is bullish about nickel. Most analysts call for a deficit this year due to stainless mills having to rely more on refined nickel. This deficit would follow a five-year period of surplus but estimates are for a deficit of less than 100,000 mt this year. That is not a big number considering that LME and Shanghai Futures Exchange inventories currently account for around 500,000 mt combined, at least five times more than the expected deficit.

3-Month Nickel Price Falls to 6-Year Low, No Recovery Likely This Year

3-Month Nickel Price Falls to 6-Year Low, No Recovery Likely This Year

Good news for stainless consumers, the nickel price dropped to its lowest level in six years this week as London Metal Exchange 3-month nickel price declined $390, or more than 3%, to $12,540 a metric ton according to the FT.

Free Download: Cut Your Nickel Shipment Costs

After hitting a high in May of last year on expectations that Indonesia’s export ban would create a shortage, the market has declined as the deficit has failed to materialize. Indonesian supply was simply replaced by increased supply from the Philippines, up 23% in 2014 from a year before.

Nickel Investors Beware, the Pig Iron Shortage Could Be a Myth

Nickel Investors Beware, the Pig Iron Shortage Could Be a Myth

The Nickel market enjoyed a bull run in Q1 of this year following the Indonesian government’s hefty export tax on nickel ore exports resulting in a defacto ban. Overnight almost a third of global supply disappeared from the market and although Chinese Nickel Pig Iron (NPI) producers had been stockpiling supplies, nickel price rose as investors assumed the market would move rapidly into deficit.

FREE Download: The Monthly MMI® Report – covering the Stainless/Nickel markets.

To their consternation, and to most observers’ surprise, it has not. Indeed, China appears to be accessing adequate supplies from other sources to supplement its stocks of high-grade Indonesian material.

Goldman Sachs, Roskill Nickel Price Forecasts At Odds; Will Ban Last?

Goldman Sachs, Roskill Nickel Price Forecasts At Odds; Will Ban Last?

You say potato, I say potatoh – such is the atmosphere lately surrounding the price outlook for nickel in 2014 and beyond. MetalMiner has been covering the Indonesian mineral export […]

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