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Nickel: 2014 price threatens to grow

28 January 2014

Data provided by analysts «Standard Bank» indicate that now the nickel market is negatively affected by a number of factors, and they will be the determining factors in the dynamics of development trends. One of these factors is a large supply of metals on the London Stock Exchange, as they include a crisis of overproduction and low demand for basic consumer. His influence was adopted in Indonesia and the law on the prohibition of the export from the country of raw materials, causing the emergence of much debate among analysts regarding the actions of the current situation in the zone of nickel in China and the world market as a whole. It should be noted that the consumption of 850,000 tons of nickel a year, last year, China has a very large volume manufacturing of nickel pig iron, which in 2014 could fall sharply and thus reduce profit producer. At the same time as most of the forecasts of analytical companies, the price of nickel ore will increase.

There are certain factors that have an important influence on the fluctuation of the nickel price. We are talking about making it a substitute for, the nickel pig iron in pigs. Not being able to get ore from Indonesia, China will replace the supplier to the Philippines, which, however, was not able to compete with Indonesia in terms of raw materials and supplies. Moreover, raw materials from the Philippines lower quality, since it contains a nickel of 1.5%, whereas the raw Indonesian nickel content is 1.8%. The lower nickel content is an unfavorable factor for the electrolytic refining, which in China is used widely enough. In addition, the Philippine raw materials in processing increases the cost of the finished product up to 3 thousand USD per ton, which complicates the work of companies that need to take into account the requirements of the Chinese producers, while at the same time improve the quality of raw materials and production. And, of course, to achieve the desired results in the shortest time possible.

Stocks of nickel ore formed to prevent the possibility of a lack of raw materials during the period of acceptance of the Indonesian Law and stored mainly in the major ports of China, is about 300 thousand tons. In this case there is no clarity on how many percent of the ore is suitable for use in the electrolytic refining. But even if the entire amount is quite suitable, it is barely enough for the first and second quarter of 2014. As a result, the nickel price per tonne will increase from 12 thousand to 15 thousand USD.

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