Nickel Prices Spike; Will There Be Soft Landing for Fasteners?
Nickel Prices Spike; Will There Be Soft Landing for Fasteners?
John Wolz
Nickel is again hitting record highs on the LME because of supply side uncertainty.
Xstrata is currently negotiating with a Canadian union to head off a potential strike at the Sudbury mining and smelting unit, which represents 4% of world nickel supply. The current labor contract ends January 31 and a recent rejection of a Canadian Auto Workers Union proposal sends negotiations back to scratch, Fastener & Fixing Europe editor Phil Matten explained.
Nickel’s three-month price rose 5.5% last week to levels above $38,000/t. Immediate delivery prices were around $3000 higher reflecting continued very tight inventory levels. At the end of the week LME-monitored stockpiles fell to under 5,000 tons equating to less than two days world consumption.
Conversely rising inventories have meant continued falls in copper prices are predicted. Inventories now stand above 200,000 tons.
Matten suggested nickel prices may still come down during 2007 but for now inventories are tight. That “highlights how reactive the market is to supply-side issues” such as the Xstrata labor negotiations.
“The longer nickel stays high and volatile the later it will be before fastener producers see any relief,” Matten noted. “The ideal for fastener companies would be a fairly slow, steady price decline,” he added. “If major fastener stockists (master distributors) feel a dramatic crash is imminent destocking is inevitable and availability will become difficult.” �2007 FastenerNews.com and Fastener & Fixing Europe
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