Nickel prices remained volatile during the month of July. The prices corrected during the initial period of July from $ 15800 per tonne on 1st July to $ 14405 per tonne on 13th July 2009 from where it bounced towards $ 15920 per tonne on 17th July 2009. The prices corrected sharply as the news of China halting its buying for reserves spread, however later on support from the Dollar ,Imports data from China and US economic recovery signs brought back buying at lower levels.
Global Stainless Steel Output Declines On Y-o-Y Basis:
The International Stainless Steel Forum (ISSF) preliminary figures for first quarter 2009 stated that the World stainless steel production was down by 34.5% or 2.54 million tonnes to 4.8 million metric tons (mmt) on a Y-o-Y basis. This is the lowest level of first quarter production since 2000.
Stainless Steel production in Asia (excluding China) declined by 40.5% to 1.28 mmt during Q1 2009. China which accounts for 27% of the stainless steel produced in the world witnessed reduced production to 1.7 mmt or 10.3% from corresponding period of Q1 2008. The second biggest stainless producing region, Western Europe/Africa, reported a decrease in stainless steel production of 46% to 1.31 mmt in Q1 2009.
Chinese world steel production fell by a far less percentage when compared to peers. ISSF said in the report that the numbers from China was reflective of the massive stimulus packages given earlier this year which didn’t led production to totally loose track.
China Refined Nickel Imports at Record High:
Chinese refined Nickel imports increased by 19 percent to 25032 tonnes in May. This is an all time high record for the second consecutive month. China GDP figures also highlighted better prospects for the economy. The Chinese economy expanded 7.9 percent year on year in the second quarter, as massive stimulus packages and record lending pushed for a rebound from the worst growth in a decade. The world's third largest economy tumbled to 6.1 percent in the first quarter as exports shrank to a decade low. Benefiting from the massive government spending in the construction of railways, roads and infrastructure, the fixed asset investment rose 33.5 percent in the first six months, the most in five years.
In last few months Nickel supply has increased in the domestic markets on the back of high imports and better demand forecasts for the future. However in the current situation the high supplies are not matching the lower demand and analyst are expecting prices to correct sooner or later.
World Largest Miner Vale Halts Sudbury Mine Operations Due To Strikes :
Companhia Vale do Rio Doce (Vale) announced that hundreds of union workers at Vale Inco's nickel operations in Sudbury are on strike on issue of Vale's proposal to reduce a bonus tied to the price of nickel. In addition, workers opposed a plan by the company to exempt new employees from its defined-benefit pension plan, which guarantees employees a reliable and steady income after retirement. Wayne Fraser, Steelworkers director for Ontario and Atlantic Canada and a member of the union's bargaining committee said 85 per cent of the members rejected the contract.
Domestic Nickel Prices Tied On Upper End:
The domestic prices of Nickel on MCX recovered well in July after initial hiccups. In the start of July prices were at Rs 778 per kg from where it slumped towards Rs 702 per kg on 13th July 2009. The recovery from thereon has been thick and fast. Prices have managed to bounce by 12.5 percent to a high of Rs 790 per kg on 17th July 2009. The forecasts for the coming months of 2009 seem tied by the fact that the recovery in the global markets will be slow. In domestic futures market Nickel prices are expected to trade between the range of Rs 805-750 per kg.
Outlook:
The refined Nickel consumption is expected to grow marginally in second half of 2009 as per ABARE (Australian Bureau of Agricultural and Resource Economics). For 2009 as a whole world nickel consumption is expected to decline by 8 percent to 1.2 million tonnes. Nickel mine production is expected to decline by 13 percent, the rapid fall in prices of Nickel has made production in most of the mines uneconomic.
Nickel mine production is forecasted to be around 1.2 million tonnes in 2009, down from 1.4 million tonnes in 2008. Nickel prices are expected to average at $ 15000 tonnes in the second half of 2009. This is almost $ 1000 per tonne lower from the latest LME prices of $ 15950 per tonne. The stocks are expected to be 7.3 weeks of consumption in 2009 as against 6.3 weeks of consumption in 2008.
No comments:
Post a Comment