The Hindu Business Line : Nickel prices perk up

Nickel cathode prices in the domestic market have increased significantly by 12.63 per cent or Rs 72 per kg to Rs 642 per kg on Monday as against Rs 570 per kg on May 10, 2004 on revival of domestic demand from stainless steel units coupled with emergence of strong support at LME on the back of reduced warehouse stocks.

Until last week, prices were down by 42 per cent or Rs 435 per kg to Rs 570 a kg from Rs 1,005, witnessed on January 5.

Nickel is mainly used in the manufacture of rust-proof stainless steel.

"Good demand from domestic stainless steel units was the key factor," an analyst said.

"Domestic prices are moving in tandem with the London market but price rise was more sharper than London on local demand," a leading importer said.

Similarly, nickel price at the London Metal Exchange (LME) also moved up by 8.5 per cent or $945 a tonne to $11,985 a tonne during the weekend from $11,040 on May 5 on good support at lower level amid reduced stocks. Warehouse stock at LME declined to 11,844 tonnes on Friday from 15,234 tonnes on May 5, down by 22 per cent.

The International Stainless Steel Forum (ISSF) has forecast another year (2004) of growth for global stainless steel production.

The forecast, released during ISSF's Annual Conference in Seoul held in mid-May shows that stainless steel production is expected to reach 24.4 million tonnes (mt) in 2004. This represents a rise of 6.8 per cent on 2003 production.

Asia is now the largest stainless steel producing area in the world. In 2004, Asian production is expected to grow by more than 7 per cent to 11.4 mt after an extraordinary high increase of almost 18 per cent in 2003.

All stainless steel melting countries in Asia will contribute to this further growth with the strongest increase expected in China, where major new capacities are about to be commissioned.

In 2003, worldwide stainless crude steel production rose by 10.4 per cent to 22.8 mt. This was on top of a rise in production of 7.8 per cent (to 20.7 mt) in 2002.