The monthly Stainless MMI® continued its long descent from Mount Kilimanjaro and registered a value of 78 in March, a decrease of 3.7% from 81 in February. The nickel price drop has now lasted 10 months since its meteoric early 2014 rise.
Nickel is hovering around its lows of 2014. We believe that these lows ($13,400 per ton) are an important level to watch.
Most analysts agree that nickel’s fundamentals remain positive, at least on the supply side. The Indonesian authorities haven’t changed their minds and the ban on exports of nickel ore to China there hasn’t changed. The flows of material between the two countries have disappeared.
Philippine NPI Supply Surge
A surge in nickel ore supply from the Philippines and the fact that China’s nickel pig-iron producers have built up significant quantities of stocks prior to the January 2014 ban compensated for the supply decrease. Indeed, the ore ban in Indonesia led to a 37% increase in nickel mining in the Philippines last year. One Filipino nickel miner even announced an IPO. It seems as if it’s just a matter of time until we see some impact on NPI production rates.
Although most analysts are focusing on the supply side, we believe that the key for the nickel price is directly related to nickel’s demand expectations. Those expectations are low at this point, and this is weighing down nickel prices.