The Hindu Business Line : Nickel cathode seen firm on tight supply

DOMESTIC nickel cathode prices are expected to rule firm in the next few days on tight supply, firm overseas markets and continued demand from the stainless steel industry.

Nickel cathode prices have increased by Rs 46 a kg from Rs 754 on January 1 to Rs 800 on Wednesday, up 6.10 per cent during the first quarter.

On the other hand, nickel cash prices at the London Metal Exchange (LME) have gone up 17.05 per cent to $16,510 per tonne from $14,105 per tonne on January 4.

"The London metal market has been volatile for the past few days. Daily fluctuation is nearly $500-1,000 per tonne. London prices have moved up by 17 per cent during January-March quarter while domestic market has gone up by just 6 per cent. The net effect on the domestic market is relatively limited. Domestic demand from stainless steel sector is steady," a leading trader said.

LME stocks were down sharply to 10,842 tonnes from 20,898 tonnes, almost half past three months.

The nickel market would continue to be sustained by its solid fundamentals. With low stocks on the LME, the average nickel price is likely to be high in 2005, an analyst said.

World consumption of primary nickel is expected to grow at a faster rate in 2005 since China appears to have stopped selling off stockpiles. World stainless steel production may continue to grow this year.

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