Thursday, April 26, 2007

Soaring Nickel prices put pressure on Stainless Steel

 A worldwide Nickel shortage that is pushing up stainless steel prices is unlikely to improve before the end of the year according to a report at Reuters.

Expect nickel's price to rise beyond its current stratospheric level, as new supply due later this year will fail to satisfy a growing need for the metal in stainless steel, jet engines and hybrid cars, analysts said this week at ISRI's annual convention.

"For nickel, we're likely to see upside price risk for the next two quarters with some of the price pressures alleviated by the end of the year," Jason Schenker, economist at Wachovia Corp. told secondary metal market participants at the Institute of Scrap Recycling Industries' spring conference.

Schenker forecast a 2007 average benchmark London Metal Exchange nickel price of $43,309 a ton, slipping to a $36,000 average in 2008 with the addition of new supply.

Meanwhile, he said he looks for shortages in the face of current robust demand to send second and third quarter averages to $46,000, nearly twice 2006's per-ton average of $24,000.

LME nickel soared to an all-time peak of $50,150 per ton last week and closed Friday at $48,700 per ton.

New supply anticipated by year end or early 2008 will most likely be insufficient to stem new price gains, analysts said.

Link to  Reuters


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