Nickel price crushed by weight of ghost stocks – by Andy Home (Reuters U.S. – February 8, 2016)

LONDON – Another day, another landmark low for the nickel price.

London Metal Exchange (LME) three-month nickel traded down to $7,900 per ton on Monday morning. Forget the troughs of the Global Financial Crisis in 2008. Nickel is now trading at levels last seen in April 2003.

And there may be worse to come.

Might the price of nickel fall below that of copper, which is currently trading on the LME around $4,600 per ton? “Not an inconceivable prospect by any means,” according to one analyst, Leon Westgate of ICBC Standard Bank. (“Commodities Weekly”, Feb. 4, 2016).

Evidently, there are two sides to that particular equation, a relatively bullish view on copper and a dire view of nickel.

But Westgate is not alone in wondering just how bad things can get for the stainless steel alloying agent.

In a world of slowing metals demand, the markets are looking for a supply response and nickel producers have failed to deliver.

Only now are the first signs of producer capitulation starting to emerge, particularly in Australia, where Mincor and Panoramic Resources are putting mines onto care and maintenance and Queensland Nickel is teetering on the brink of insolvency.

But even if closures now start coming through, nickel has another problem in the form of the amount of inventory hanging over the market.

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