Are the Koreans bragging? Any metallurgists out there who would care to share their expertise? What would they use instead of nickel to toughen up steel or is it all part of a game to bring nickel price down?
From The Australian
Nickel slides as Korean steelmakers find substitute Kevin Andrusiak May 25, 2007
NICKEL prices fell to their lowest levels since March as stocks in warehouses monitored by the London Metal Exchange continued to improve and market analysts warned of a potential slowdown by stainless steel manufacturers. Late last night, nickel prices were down a further 0.8 per cent in London to just under $US22 a pound, or $US48,400 a tonne, as LME inventories gained for the fourth straight day.
Nickel reached as high as $US53,500 a tonne earlier this month as global supplies remained tight in what has been a boon for Australian producers.
However, many stainless steel producers have begun substituting nickel in their stainless steel manufacturing as the price rises eat into margins.
South Korean metal giant Posco says it will sell 120,000 tonnes of nickel-free stainless steel to customers next year, or about 6 per cent of its annual stainless steel output.
According to a report from the International Nickel Study Group last week, nickel production will outpace usage by about 70,000 tonnes this year.
LME stockpiles stand at 7200 tonnes, up 366 tonnes in a single day.
Jonathan Barratt, managing director of Sydney-based Commodity Broking Services, said that the nickel market was so volatile that even a 10 per cent fall within a 48-hour period was quite possible.
"There are still problems for nickel in terms of global supply," Mr Barratt said.
"At times, nickel is not getting into warehouses as quickly as it is getting bought.
"Nickel is a very hard market to trade and when it corrects, it will correct very quickly."
Mr Barratt's preferred metals for trading, in terms of value, are zinc and lead.
Meanwhile, copper prices have bucked a three-day losing streak to post improved prices.
The spot copper price was up more than 1.1 per cent in early London trade to $US3.3468 a pound, or $US7376 a tonne.
Twelve months ago, a tonne of copper on the spot market was worth about $US8300 a tonne.
Before last night's upwards movement, the price had dropped 7.2 per cent this month because of inventory building in China.
"Each year China has a big build-up in copper stocks during winter and use that in summer," Mr Barratt said.
"There is a bit of an overhang from that in the market at the moment and some of the stock is not getting used and it is not getting used because of the price.
"Is this the top for copper?
It is going to have to do a lot of work to get back to the $US8000 level.
"In a nutshell, I think we are going to have a breather."
Aluminium spot prices were little changed early last night at $US1.27 a pound - $US2794 a tonne - and zinc spot was also steady at $US1.63 a pound, $US3586 a tonne. Lead, which has gained about 6.7 per cent in the last two months, was worth US95.56c a pound.
MRE Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
