THE price of nickel may have already peaked this year, with fundamentals expected to turn increasingly sour over the remainder of 2011 as the market moves.
“There is mounting evidence to indicate that the nickel price has already peaked for this year, and that in the remaining months of 2011 market fundamentals will fail to offer anything but a modicum of support,” a report by research house VM Group together with ABN Amro said.
“While the market has been in a deficit thus far in 2011 on the back of strong stainless steel production growth, we expect the market to move into surplus in the second half of the year,” the bank said. ” So current prices appear unsustainable from a fundamental perspective.”
“If all of the new and expanded supply comes online without a hitch, then the nickel market is almost certain to be heading towards a multi-year market surplus,” the report said.