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Nickel booms as supply deficit looms

Metal News - Published on Wed, 21 Aug 2019

Image Source: Financial Review
Financial Review reported that one of Australia's leading nickel producers has warned that a failure by the industry to find new supplies may encourage end-users to look for alternatives as the threat of an Indonesian export ban and forecast deficits propelled the stainless steel input to a near five-year high of more than USD 16,000 a tonne.

Nickel prices have proved immune to the volatility that has hobbled global stockmarkets and many growth-sensitive commodities over the past two weeks, with speculation major producer Indonesia may bring forward a ban on the exports of raw ore sparking a scramble for the metal at a time when inventories on the London Metals Exchange are at their lowest since mid-2015.

The rush for metal reshaped the nickel futures curve over the past week. Analysts pointed to a short squeeze as the front-end of the curve or near-term contracts – moved into backwardation, meaning traders pushed cash prices higher than later month prices in order to urgently get their hands on the metal. Cash nickel prices have surged from a low of around USD 11,500 a tonne in mid-June and last traded at a USD 22 a tonne premium to three-month nickel. In early July, cash nickel was trading at a USD 90 a tonne discount to the three-month contract.

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Posted By : Amom Remju on Wed, 21 Aug 2019
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