Stellar nickel rally runs out of steam
This article is an extract of the monthly Commodity Briefing Service for Nickel which examines global nickel market trends over the past month.
By Louise Gammon | 15 September 2017
There are more mixed messages surrounding the nickel market than for the other base metals. Much of the uncertainty relates to the direction of mining policy in the Philippines and export regulations in Indonesia. While both of these issues remain in a state of flux, nickel prices are likely to remain volatile, with risk weighting probably skewed higher.
Although S&P Global Market Intelligence does expect the global nickel market to register deficits each year through 2019, these are at levels that would not fully consume the current exchange stock overhang. Accordingly, our price forecast exhibits a gradually increasing trend. Recent price action will, no doubt, require some mark-to-market adjustment to our nearer-term expectations, but we would not, at this stage, see the need for any radical rerating of the medium- to longer-term forecasts. Our average annual three-month price forecasts for 2018 and 2019 remain at US$10,267/t and US$10,371/t, respectively.
Nickel prices had an impressive run from mid-June through early September, punching above US$12,000/t for the first time in over two years. From the June 12 and June 14 lows, respectively, London Metal Exchange three-month and SHFE nickel prices have leapt 42.6% and 33.9% to their September 4 traded peaks. The LME price closed at US$12,250/t, the highest daily close since June 2015.
