Nickel advances as supply tightens

Author: Paul Ploumis09 Jan 2015 Last updated at 04:27:47 GMT

LONDON (Scrap Monster):The cost of nickel pig iron, which is a lower grade alternative for the refined nickel ore, is increasing, and the inventories are low in commodity, therefore there is a good chance of restocking. Gayle Berry, a strategist at Jefferies Group LLC, stated that, there is a chance of a deficit in the commodity at a rate of about 40,000 metric tonnes, just after the 45,000 tonnes surplus, which occurred in the year 2014. In the second half of the year 2014, the value of nickel declined to about 20 percent, which indicated a decline in demand in China, as well as in Europe.

An analyst at INTL FCStone, Edward Meir, stated that, the supply conditions of the commodity are a great concern, and some of the buyers are reclining after the big drop in the price of the commodity. There is a possibility that, there will not be a big rally as there is support at this level, he added.

The value of nickel on the London Metal Exchange, which is to be delivered in three months, hiked by 1.9 percent, and settled at 15,550 dollars per tonne. Recently, the price of the commodity had reached 15,567 dollars per tonne, which is the highest value since the month of December. The metal hiked for four straight days in a row.

Berry, in a report stated that, the current price of nickel offer buying opportunity as well as favor building length on dips, which are below 16,000 dollars per tonne, in the year of 2015.