Nickel Joins the Precious League
Nickel peaked yesterday to the record $30,000 a ton on the London Metal Exchange (LME). The reasons could be the lack of metal coupled with speculative trading of the hedge funds.
Having broken all records, Nickel soared to above $30,000 a ton on LME Wednesday with the spot contracts quoted at $31,700 a ton. It looks like its price will be soon calculated similar to precious metal prices, i.e. based on the dollars per a troy ounce. Under this method of calculation, a troy ounce of nickel would have cost $0.99 on LME yesterday.
The pace of the futures wasn’t so quick – the three-month contracts rose to $29,300 a ton, having stepped up more than two fold since late March, when the rise in prices became skyrocketing.
The prices go up mostly on reduced metal stock on LME, which lowered to two-day global consumption, said Alfa Bank analysts Vladimir Zhukov. Another reason is the fear that Canadian Inco will suspend supplies due to the strike, the analyst specified.
“The fundamental cause of the increase roots in the lack of metal. With growth in stainless steel output, speculators are boosting the price. Many hedge funds buy metal as a good alternative to dollar,” said IFK Metropol analyst Denis Nushtayev.
Traders think nickel will soon beat $30,000 a ton for three-month contracts and stand still for long afterwards. The reasons are objective. Consumer of more than 15 percent of the world nickel, China, is curtailing the import. Nickel prices surged by nearly 40 percent from mid.-May there, having climbed to above $33,000. The backlash was the closure of small steel plants in China and the drop in the nickel import. In view of this trend, the nickel market may count only on speculative players to sustain the acceleration, but their support will hardly last for long.
www.kommersant.com
All the Article in Russian as of Aug. 17, 2006
|
