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Thursday, July 2, 2015
Nickel prospects likely to improve in H2 2015
According to the third quarter commodity outlook report released by Deutsche Bank, the nickel market looks poised to improve significantly during second half of the current year. Incidentally, LME Nickel prices had touched six-year low on Tuesday, dropping to sub-$11,000 per mt level.
The research note states that the firm is confident on the prospects of nickel market and that it maintains a positive outlook on nickel market, going forward.
The Chinese unwrought non-alloyed nickel imports surged higher during the month of May this year, rising 127% year-on-year to 23,146 mt, said most recent data released by the country’s General Administration of Customs. The imports had totaled only 5,613 mt and 18,220 mt during the months of March and April respectively. This indicates that refined nickel import market has more or less returned to normalcy. On the other hand, a portion of these imports are assumed to be from Russia ahead of SHFE approval of Russian nickel deliveries.
Sources indicate that Norilsk Nickel has registered three bands- NORILSK COMBINE H-1, SEVERONICKEL COMBINE H-1, and SEVERONICKEL COMBINE H-1Y for physical delivery on the exchange.
The sharp rise in ferronickel imports by China during the month of May this year is also considered as a positive trigger for nickel market. The imports of ferronickel surged higher by 247% year-on-year to 61,551 mt. However, the imports were down when matched with the imports of 75,154 mt in April. The cumulative imports during the initial five-month period of the year were up by 110%.
Meantime, Shanghai nickel premiums continue to remain at high levels, indicating supply tightness in physical market. The tightening stainless steel scrap availability in Europe is also considered to favor nickel market, as stainless steel market accounts for nearly one-third of the global nickel consumption.
According to Deutsche Bank, annual Nickel prices are likely to touch $14,520/mt in 2015.