« Nickel Market Update
Nickel Market Update
Nickel has gained ground in the past month, with spot prices rising from US$16,430 a metric ton (MT) on the London Metal Exchange to $18,275 on Tuesday, according to Metal-Pages.
The rise puts the metal roughly back where it started the year. And prices could move higher still, according to Bart Melek, head of commodity strategy at TD Securities. That is largely due to the increasing urbanization of China, which consumes 40 percent of the world’s nickel output. Even though the country’s economy is slowing, it is “not collapsing,” said Melek.
The economist is also forecasting 3 percent growth for the global economy as a whole in 2012 and 4 percent next year. “Anything over 3 percent is a good news story for commodities,” he said.
Nickel prices could also gain as companies close producing mines. Indian mining equipment industry For example, this week, Xstrata (LSE:XTA) said it will close its Cosmos nickel mine in Western Australia due to lower nickel prices and the high Australian dollar. So far this year, the mine has produced 4,200 MT of nickel concentrate.
In addition, Russia’s Norilsk Nickel (MCX:GMKN), the world’s largest producer of nickel and palladium, said it will cut its overall investment program by 10 percent in 2012 due to weaker metal prices.
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