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Nickel get boost from Chinese steel market gains

Metal News - Published on Wed, 06 Dec 2017

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Reuters reported that nickel gained as the metal mainly used in stainless steel got a boost after Chinese steel futures touched three-month highs. Steel and iron ore contracts in Shanghai surged on Monday as government-ordered steel production cutbacks to reduce pollution led to tighter supplies for some mill products.

Ms Caroline Bain, chief commodities economist at Capital Economics, said that stronger prices might not last long because eventually the steel production cutbacks during the peak Chinese smog season in the winter would mean less need for nickel.

Benchmark nickel on the London Metal Exchange climbed 0.8 % to USD 11,385 a tonne in official open outcry trading, building on gains of 1.6 USD .

Capital Economics expects nickel which has declined 12 % from a two-year peak of USD 13,030 hit on Nov 1 to end this year at USD 10,750.

Ms Bain added that other metals are also likely to see a modest amount of further downside.

Ms Bain said that “There’s quite a lot of speculation in the market and we think there’s over-optimism about the strength of Chinese demand.” Ms Bain added that “I think there are clear signs now that the economy is cooling, particularly in the metals-intensive industries.”

Mr Alastair Munro at broker Marex Spectron said that “Whilst China property concerns remain, steady global growth expectations coupled with on-going mine supply disruptions are likely to lend support on dips with USD 6,550-USD 6,650 the bottom of a new range.”

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Posted By : Rabi Wangkhem on Wed, 06 Dec 2017
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