It is reported that LME nickel price for three month futures at the afternoon market on June 29th 2009 had temporarily risen to USD 16,000 per tonne, which recorded the highest price in this year. The circumstances surrounding nickel price are turning gradually to a favorable aspect but marvelous imports of nickel by China in the first half of 2009 controlled nickel price.

China imported 78,203 tonnes of nickel metal in January to May 2009 and it is certain that China would have imported nickel metal on a scale of 100,000 tonnes in the January to June 2009 period. However, it is questioned whether these 10,000 tonnes of nickel metal were really delivered to such actual consumers as stainless steel mills or not.

China has turned from April 2009 to increase their production of stainless steel and the market has had a strong expectation of this expansion of the production in China. It was certainly anticipated at the beginning of this year that China will reduce their production of stainless steel in 2009, but this forecast has changed to increase the production in 2009 by 4% to 7.20 million tonnes to 7.30 million tonnes on an annualized base in comparison with that in the preceding year of 2008.

According to estimation by International Nickel Study Group, the world supply of nickel in 2009 is anticipated to be an excess of 80,000 tonnes as compared to a surplus of 110,000 tonnes in 2008, while Societe Generale of France has recently estimated as the world supply of nickel in 2009 is anticipated to have a surplus of 38,000 tonnes. It has also forecasted that the supply and demand of nickel in the world for 2009 will be nickel production: 1,220,000 tonnes, nickel consumption: 1,184,000 tonnes and balance: surplus of 38,000 tonnes.

This basic tone to export ferronickel from Japan has still continued even in April to June 2009 quarter and, as a matter of fact, Japan exported 6,516 tonnes of nickel in ferronickel in April to May and is anticipated to export 9,774 tonnes of nickel in ferronickel in April to June quarter of 2009. Japan is estimated to have produced ferronickel on a scale of 10,000 tonnes to 12,000 tonnes on nickel content base in April to June quarter and supposedly exported 80% of the output, following the case in January to March quarter and keeping a high level on exports.

(Sourced from TEX Report Limited)