The Hindu Business Line : Nickel cathode declines on low demand

This has been mainly due to selective purchases by the domestic stainless steel industry, supported by weak London metals market in view of sharp increase in warehouse stocks.

Nickel prices at the London Metal Exchange (LME) were down $2,140 a tonne at $12,150 (around Rs 5.62 lakh)a tonne on Monday from $14,290 (around Rs 6.61 lakh) a tonne as on August 20 on continued selling pressure from funds coupled with increased warehouse stocks level.

Warehouse stock at LME was increased to 13,674 tonnes on Friday from 7,956 tonnes on August 20, up by 46 per cent.

"A fall in domestic nickel price is not much sharper than the London market due to slow domestic demand. Price in London market was down by 16 per cent in less than a month because of improved stocks position. Warehouse stocks in London were up by 46 per cent," an importer said.

"Prices may recover from the current level on reports of revival of fresh demand from Japan and US," an analyst said.

A panel of speakers assembled in early September by the Pittsburgh Chapter of the Institute of Scrap Recycling Industries Inc (ISRI) for its annual Nickel-Stainless Roundtable noted that demand from China and reviving economies of US and Japan should keep nickel prices aloft and the demand strong for stainless steel scrap.

Even though nickel producers have some new mining projects underway, the current tilt towards more demand than supply could stay in place in the nickel sector through 2005.

"The outlook for nickel is still fundamentally strong for the next two years," said Mr John Vorberger, Sales and Marketing Manager of Special Products with Eramet North America, Coraopolis, Pa.

Former nickel trader Mr Martin Abbott, now publisher of American Metal

Market, New York, remarked that several potential problems could cause nickel demand and pricing to recede in the next several years, although the emergence of industrial economies in China and India remain formidable growth factors.