10 Updates

Why Ukraine Crisis Could Drive Nickel To $25,000/Tonne

May 5 2014, 11:42am CDT | by

Nickel has enjoyed a solid price spurt in recent months, fuelled by fears over heavy supply disruptions after Indonesia — home to around a fifth of total nickel production — placed an export ban on...

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12 weeks ago

Why Ukraine Crisis Could Drive Nickel To $25,000/Tonne

May 5 2014, 11:42am CDT | by

Nickel has enjoyed a solid price spurt in recent months, fuelled by fears over heavy supply disruptions after Indonesia — home to around a fifth of total nickel production — placed an export ban on nickel ore back in January.

The move was prompted by a 2009 law calling for more domestic refined output, a situation which is significantly hampering Chinese production of nickel pig iron (NPI) as ore shipments dry up.  As Indonesian refining capacity could be described as inadequate at best, nickel prices have shot 35% higher since the turn of the year, striking 14-month peaks above $18,700 per tonne in the process and looking poised for another move skywards.

Meanwhile, the evolving political situation in Ukraine is also adding pressure to the nickel market, and analysts reckon that a backdrop of escalating trade restrictions on Moscow from the West could add fresh ammunition for the metal to surge still higher.

Market balance under the microscope

Indeed, Bank of America-Merrill Lynch upped its price forecasts in recent weeks in anticipation of lingering output issues worldwide, and fully expects the metal to strike $25,000 within the next 12 months.

The institution reckons that issues in Indonesia are set to push the nickel market into deficit next year, while the possibility of curbs on Russian shipments could drive stocks to critically low levels in coming months. “Possible sanctions on Russia, which supplies 12% of global nickel production, have recently accelerated price increases,” the bank notes.

Over the coming days, we would follow developments around Ukraine closely [as] any sanctions which may limit nickel shipments would in all likelihood add to the rally,” it adds.

Russia’s Norilsk Nickel is the single-largest producer of the metal, and group production of 285,000 tonnes last year accounted for more than 15% of the global total. Along with energy giant Gazprom, the mining giant has been targeted at one of the more likely recipients of strict economic sanctions.

Bank of America-Merrill Lynch says that it expects nickel to average $16,091 per tonne in 2014, up from $15,034 last year, before marching on to $17,839 and $18,000 in 2015 and 2016 respectively. But as long as the sales ban in Indonesia persists, and intensifying military action in Eastern Europe intensifies trade curbs on Russia, nickel prices could easily surge past these readings.

Demand on the rise

Meanwhile, an environment of solidly-recovering nickel demand, helped by improving financial conditions in Europe and a continued uptick in the US economy, is expected to exacerbate tightness in the metal’s market balance.

In particular, booming production from stainless steel mills — the sector is responsible for around two-thirds of global nickel off-take — is expected to result in fresh output records this year. Indeed, metals consultancy MEPS expects total crude stainless steel output to hit a new record of 39.5 million tonnes in 2014, up 3.6% from last year’s all-time high of 38.1 million tonnes.

Sucden Financial agrees that robust organic growth should provide a boon to stainless steel demand, with consumption rising faster than the majority of the base metals. This situation “… should carry nickel demand up with it,” the broker argues, while “significantly more interest from consumers to restock is likely this year ahead of next year’s move into a significant deficit.”

For the time being nickel stock levels remain at healthy levels. London Metal Exchange inventories have steadily moved higher since 2011, and although outflows have stepped up in recent weeks levels still stand close to a record 290,000 tonnes. Meanwhile China has been stockpiling vast amounts of ore over many months in anticipation of Indonesia’s export ban.

But as sales restrictions from South-East Asia look set to linger, and the political situation in Ukraine looks set to get a whole lot worse, nickel prices — helped by a steadily-improving demand picture — could be set for further price appreciation in the near future.

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was to ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rak ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minist ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selata ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Musta ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocatio ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (Kidex) toda ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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