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Bloomberg reported that Citigroup Inc. (NYSE:C) believes that nickel, thus far this year’s best-performing base metal, will “extend its rally” due to the fact that “the market is headed for a bigger deficit than previously forecast.”
Bloomberg reported that Citigroup Inc. (NYSE:C) believes that nickel, thus far this year’s best-performing base metal, will “extend its rally” due to the fact that “the market is headed for a bigger deficit than previously forecast.”
As quoted in the market news:
World supply will be in a 3,000 ton shortfall by the end of the year, with the deficit widening to 134,900 tons next year, Edward Morse, global head of commodities at Citigroup, said in a report dated yesterday. The bank previously projected a 30,100-ton surplus for 2014 and 132,200-ton deficit for 2015. Citigroup raised its 2014 average price forecast by almost 12 percent to $18,550 a ton.
Nickel, used in stainless steel, has surged 39 percent this year after Indonesia, the biggest producer from mines, banned shipments of unrefined ores in January. Imports of Indonesian nickel ore by China in May fell 99 percent from last year, according to the bank. Official results from the Southeast Asian nation’s July 9 presidential election are due in less than two weeks, with neither candidate seen as lifting the export curbs.
‘Developments have progressed more rapidly than forecast’ after the ban, the bank said. ‘We do not expect any policy changes from an incoming government.’