UNITED STATES October 15 2013 11:00 AM
LONDON (Scrap Register): Nickel prices to rise 22% from current level to $17,000 a ton by the fourth quarter of next year, said Bank of America Merrill Lynch.
“In short, we are comfortable with our forecast that nickel could rise to $17,000 a ton or $7.71 a pound by the fourth quarter of nest year, approximately 22% above prices currently implied by the forward curve,” the American Bank added.
According to the bank, it looks for stronger nickel prices in 2014, although conceding this is not a consensus view. Given steady surpluses, nickel has been the most unloved metal for a while.
“In our view, producers are aware of the supply overhang. However, uncertainty over the implementation of an export ban from Indonesia, a key supplier to China’s nickel pig iron producers, was one reason output curtailments have so far been few and far between. Over the coming months, we believe Indonesia will clarify its trade policies and that may motivate miners to cut,” they added.
In fact, the bank said that some firms are already delaying output increases or shuttering operations.