Nickel will be the best performing metal in 20162016.03.21 08:49
"Market abuse me a thousand times, I wait for the market such as first love." In the long dead eyes, is the beauty of industrial metal nickel.
Nickel prices were thought to have risen sharply last year, but ended up with a twelve year low in 2015. Even worse, this trend is still in the early 2016, the London Metal Exchange (LME) nickel price hit $8120 per ton on Tuesday, the lowest in twelve years, up to 44% so far this year, up to now.
However, even so, the market is still optimistic about the price of nickel. Bloomberg article said that the market consensus is expected to be a long time to expect the supply reduction will eventually become a reality. For speculators betting on an increase in the price of nickel, downstream to digest inventory, mine output will be because the majority of mine loss and reduced, the biggest buyer of China market demand will improve. By then, the price of nickel will rebound.
Bloomberg News survey of 16 analysts conducted the results show that they believe that the average price of nickel in 2016 will be $12250 per ton. This means that LME nickel prices need to rise from $8240 on Tuesday's closing price of 49%.
According to the Financial Times reported that at present, about 80% of the world's nickel production is a loss. Last month, the world's third largest nickel supplier Glencore said's Australian MUrrinMurrin mines have already not to make money, may be closed.
Some mines intend to cut production. In November 27, 2015, China's 8 major nickel production companies announced a joint production reduction of tons in December 2015, and plans to cut in 2016 not less than 20% of the metal output.
Need to be reminded that the reality is likely to deviate from the expectations. Think about it before, including Goldman Sachs, the institutions are expected to nickel in 2015 global supply shortage, Indonesia, the world's largest supply of the promulgation of nickel and other metal ore export ban once stimulated nickel prices soared to at the time of the highest level in two years.
However the actual situation is, the second largest laterite nickel ore supplies in the Philippines quickly fill Indonesia leave the supply gap, Chinese steel mills for nickel demand slowdown, nickel inventories is washed on high. In the end, the price of nickel was the worst of last year's LME metals.
At least so far, there is no significant improvement in the supply and demand situation in the nickel market. Stocks are still high, Tuesday's data show that the London Metal Exchange (LME) refined nickel inventories increased again, to more than tons, an increase of 11% over last month. Citigroup said that as of the end of 2015, LME and the stock exchange's total inventory has risen to a record 490 thousand tons.
China's demand remains weak. Domestic iron and steel industry is still in dire straits, the government is committed to in clearing excess capacity, reduce environmental pollution, to carry out the merger and reorganization of state-owned enterprises.
Supply side, mine production has not been declared successful, Brazil mining giant vale but plans to increase production this year.
Reuters quoted a HSBC analyst AshLazenby said, the line is expected to cut the price of nickel 2016-18 22-34%. Nickel ore inventory of up to one and a half tons, will take about three years to get rid of half of the inventory.
Russian Norilsk Nickel nickel price in the short term will not think well. Two insider told Bloomberg news, the company said in a financial plan through the last month, is expected in 2016 the average price of nickel will be $9000 per ton. This is lower than the actual average price of $11890 per ton in 2015, 24%.
Morgan Stanley in December 15th released the research report is expected in 2016, the average price of nickel will be $10692 per ton.