Kip Keen: Hold Off on Nickel Price Excitement

Mineweb’s Kip Keen published an article on the nickel price, noting that while it’s been faring well lately, it’s perhaps not yet time for investors to get too excited.

He states:

Yet it’s worth checking excitement about any advertised boom in prices, especially with lofty targets (say back to $10/lb or more as nickel traded in 2010-2011).

For one, nickel supply hardly seems to be hurting at the moment, despite export restrictions in Indonesia.

With supply from the Philippines bridging the gap, for now, few analysts predict giant supply holes in the market near term.

Credit Suisse assesses nickel as showing a ‘near-balanced market in 2015′ that may slide into deficit next year assuming higher cost nickel pig iron (NPI) production slows down.

Commerzbank shares the view. While it noted the ongoing supply disruption at BHP’s Cerro Matoso mine in Colombia was affecting supply and seemingly boosting prices, it sees little reason to be concerned over supply right now.

‘This (the closure of Cerro Matoso) is evidently driving up the price despite the fact that the global nickel market is amply supplied in our opinion,’ Commerzbank noted recently.

What’s more, if Chinese stockpiles are in decline, LME stockpiles have been on the rise. Meantime, steel demand in China has been sluggish.

So in terms of more immediate supply issues, it’s not exactly a super bullish moment for nickel.

Click here to read the full Mineweb report.