Nickel soars on low stocks, strong demand Fri Jul 14, 2006 8:06am ET Email This Article | Print This Article | Reprints [-] Text [+] By Nick Trevethan
LONDON (Reuters) - Critically low stock levels, strong demand and delays in bringing major projects on stream could see nickel prices soar above $30,000 a tonne, dealers say.
Nickel prices are up sixfold from cyclical lows in late 2001, spurred by massive demand from stainless steel mills, which consume about 70 percent of the world's nickel.
"Chances are stocks will fall further before they rise. Cash prices are already near $30,000 a tonne and in the current positive climate, $30,000 is a very real possibility," Stephen Briggs, analyst at SGCIB, said.
Three-month nickel futures on the London Metal Exchange (LME), the world's largest non-ferrous metals market, hit a record high of $26,600 on Wednesday, and on Friday at 1158 GMT stood at $26,250.
"Demand from stainless steel suppliers has remained very, very strong," Denis Couture, spokesman for Falconbridge, (FAL.TO: Quote, Profile, Research), the world's fourth largest nickel producer, said.
"There are reports that some customers are worried about availability of supply and are making purchases to secure the supply, that's why prices are going up."
Demand growth has been especially strong in China where stainless steel capacity has risen sharply.
State-owned Chinese research group, Antaike, predicts China's stainless steel production will rise 40 percent to 4.7 million tonnes this year and Chinese nickel consumption is forecast at 218,000 tonnes this year. Continued...
