Today Online reported that nickel, the top performing industrial metal this year, is expected to recover recent losses in the second half of the year, a Reuters poll showed. The price of nickel, used in stainless steel and an ingredient in electric vehicle batteries, has gained 7 % this year while the other five main base metals are all down.
The London Metal Exchange index of industrial metals has slumped 13 %, partly dragged down by worries about global growth and metals demand amid trade tensions.
Supporting nickel prices this year has been a 28 % fall in LME stocks to their lowest in more than four years.
The LME cash nickel price in the third quarter is seen averaging USD 14,250 a tonne, according to the median forecast of 25 analysts.
This is 5 % higher than Wednesday’s close and up 9 % from a forecast of USD 13,024 in the previous poll in January. However, it is down 10 % from a peak hit in April.
Ms Soni Kumari ANZ analyst said that “The nickel market deficit has been larger than expected on stronger demand and lower supplies.”
Analysts forecast a 42 % deeper deficit this year at 71,000 tonnes compared to the previous poll.
Nickel is also benefiting from political risks in the Philippines, analysts said.
The president of the Philippines, the world’s No.2 nickel ore supplier after Indonesia, said this month he would soon halt mining because of the environmental damage it has cause while an industry group warned ore exports could drop by up to 17 percent this year.
Analysts have trimmed copper forecasts since the April poll but still see a rebound from the 16 % fall from a 4-1/2 year peak hit last month.
Prices had surged partly due to fears about a potential strike at Escondida in Chile, the world’s biggest copper mine, where talks continue.
Mr Nicholas Snowdon, an analyst at Deutsche Bank said that “If there is a strike at Escondida, that is bound to generate short covering and price support.”
Mine supply has been stronger than expected in the first half, but mine output growth is due to deteriorate on a yearly basis in the second half, he said.
The average LME cash copper price for the current quarter is pegged at USD 6,834 a tonne, down from USD 7,000 in the April poll, but up 12 % from its current level.
Consensus forecasts for a deficit this year have more than doubled to 129,000 tonnes.
