researcher, re nickel prices..point-counterpoint...Here's a new article out today predicting a nickel shortage through at least the end of the decade. Time will tell, but as long as inventories remain extremely low I will remain a bull on nickel (and zinc btw)
Nickel Rises to a 19-Year High in London as Inventory Plunges
By Chanyaporn Chanjaroen
Dec. 1 (Bloomberg) -- Nickel advanced to a 19-year high in London as inventory of the metal used in stainless steel dropped the most in seven weeks.
Stockpiles of nickel tracked by the London Metal Exchange fell 9.8 percent to 6,066 tons, the exchange said today. That's the largest one-day decline since Oct. 13. Supplies may not meet demand before the ``end'' of the decade, said Xstrata Plc, which bought Canadian nickel producer Falconbridge Ltd. in September.
``The challenge of nickel is, how much of this is already in the current price?'' said Jon Bergtheil, head of global metals strategy at JPMorgan Securities Ltd. in London.
Nickel for delivery in three months on the LME gained $264, or 0.8 percent, to $34,214 a ton as of 12:20 p.m. in London, after earlier gaining as much as $350, or 1 percent, to $34,300, the highest since at least 1987. That beats the previous high set on Nov. 27 by $200.
Nickel has more than doubled this year, driven by expanding demand from China and a lack of new production capacity, David Rae, vice president of sales and marketing at Zug, Switzerland- based Xstrata's nickel unit, said in a presentation yesterday. He expects a supply shortage to continue through this decade.
``Under such conditions the nickel price can be expected to remain well above long-term averages,'' Rae said. Nickel has averaged $8,228 a ton since 1987.
Copper Outlook
Goldman Sachs Group Inc., the most profitable investment bank in Wall Street history, forecast nickel for immediate delivery will average $25,000 next year, 33 percent more than its previous estimate. The global supply shortfall will be 20,000 tons this year, the bank said in a report released today.
Copper declined $95.75, or 1.4 percent, to $6,984.25 a ton in London. A close at the level would bring this week's loss to 2.4 percent.
Prices of copper, used in wires and pipes, may rise next week, according to a Bloomberg News survey, because of a shortage of concentrate, the raw material used by smelters, and after inventory of the finished metal fell, reducing supply.
Ten of 17 analysts, investors and traders surveyed by Bloomberg yesterday forecast copper will gain next week. Three expected a decline and four little change.
Mine production lagged behind smelting capacity in the first eight months of the year, the International Copper Study Group reported earlier this month. Stockpiles monitored by commodity exchanges in London, New York and Shanghai have dropped 3 percent this week to 213,570 metric tons, a two-week low, according to data compiled by Bloomberg.
Copper faces further threats of supply disruptions. Workers at Xstrata's Altonorte smelter in northern Chile will vote this month to strike following a wage dispute, union president Isidro Cabrera said yesterday.
A strike would interrupt production at the smelter because the union represents 70 percent of its 500 workers, Cabrera said. The smelter last year produced 297,567 tons of copper anode, a form of metal prior to the refining process.
Among LME-traded metals, aluminum dropped $ to $2,740 a ton and lead gained $10, or 0.6 percent, to $1,673, tin rose $150 to $10,600 a ton. Zinc advanced $9.50 to $4,384 a ton.
To contact the reporter on the story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net .
AI
