Jinchuan Raises Refined Nickel Price to RMB 92,000/mt From RMB 89,000/mt

JINCHUAN, Apr. 10 -- Asian top nickel producer Jinchuan Group announced Wednesday that it will raise its ex-factory price of electrolytic nickel from 89,000 yuan/ton to 92,000 yuan/ton, the third time for its price hike in a month.

    The daily average price of nickel on Shanghai spot market arrived at 91,750 yuan/ton Wednesday, up 1,250 yuan over the previous day.

    Jinchuan adjusted down its ex-factory price of nickel from 86,000 yuan/ton to the year's bottom of 84,000 yuan/ton on March 12, but then raised the price to 86,000 yuan/ton on March 20, and further to 89,000 yuan/ton on April 3.

    It's learned that LME nickel stocks still hovered at around 106,000 tons, but the nickel price, pushed by bottom fishing, had surged from 9,500 U.S. dollars at the end of March to 11,000 U.S. dollars recently. It continued to demonstrate rallying trend this week.

    Market analysts note that Jinchuan is unwilling to sell on expectation for higher price, leading to tight supply of nickel. Meanwhile, speculators rush for stockpiling and the downstream manufacturers prepare to add stocks at a low price. All these factors serve to boost nickel price on Shanghai market.

    A person with Baosteel holds that nickel price has limited room to decline from 9,000 U.S. dollars/ton due to sound demand for some stainless steel products. The company's stainless steel output reached 100,000 tons in the January-March period without piling up stocks.

    A report by BOC International Ltd. predicted that the domestic stainless steel production capacity stayed about 10 million tons, with annual capacity of 7.2 million tons and demand of seven million tons.

    According to the report, quick capacity expansion of nickel in the past two years has led to its glut on the domestic market and the government is considering purchase of 30,000-50,000 tons for reserve. However, as the government's purchase price is lower than the cash price, producers are reluctant to sell and the deal hasn't been carried out yet.

    Jinchuan president Yang Zhiqiang revealed that the company plans to expand nickel output when the price is at a low level. It aims to produce 120,000 tons of nickel and about 400,000 tons of copper this year.

    (Source: chinamining.org)