Nickel Prices May Be Close To Establishing Bottom-BNP Paribas

BNP Paribas senior metals strategist Stephen Briggs says Nickel prices may be close to "bottoming out," First, setbacks at new plants will curb supply surpluses in 2012 and 2013, he says. Second, the price has been cutting ever deeper into the cost curve, with the Chinese nickel pig iron industry particularly exposed. Third, NPI producers are also confronted by other problems. Fourth, although nickel demand has been weak in the third quarter for cyclical as well as seasonal reasons, it should be firmer at least on the latter front in the fourth quarter, Briggs says. BNP has cut its forecast for world nickel demand growth this year to 4.5% from 5%-5.5%, with growth of 7.5% expected in 2013. However, BNP said, operational setbacks at new mines mean less nickel may be produced than originally expected. The bank cut its forecast for growth in finished nickel supply to 5.5% from 7%. The bank concedes its mid-June forecast for $17,500 nickel in the third quarter and $18,600 in the fourth "look increasingly out of reach." However, BNP adds: "at the same time, we believe the downside for nickel has become distinctly limited." 

Source:Kitcometals.com