Reuters reported that while the prospect of nickel supply tightness has “put a floor under prices,” a true recovery won’t happen until Chinese stainless steel mills increase their orders.

Reuters reported that while the prospect of nickel supply tightness has “put a floor under prices,” a true recovery won’t happen until Chinese stainless steel mills increase their orders. When that happens, global stockpiles of the metal should begin to sink.
As quoted in the market news:

Benchmark nickel on the London Metal Exchange fell to six-year lows of $10 430/t last week on worries about demand, particularly after a tumble in Chinese equities.
Prices have climbed back to around $11 500 yet remain at just half the $21 625 hit in May 2014 after Indonesia banned nickel ore exports.
The sell-off that followed that peak was triggered by suppliers in the Philippines who moved to supply ore to Chinese smelters, which produce nickel pig iron, a cheaper alternative to refined nickel that costs around $15 000/t to make.
Chinese nickel pig-iron producers are losing money and have cut output.
Analysts estimate China’s nickel pig-iron production fell about 25% year-on-year between January and May to below 170 000 t.

Jim Lennon, senior commodities consultant at Macquarie, commented: