Nickel Can’t Find a Silver Lining – by Biman Mukherji (Wall Street Journal – March 7, 2016)

NEW DELHI—Amid gloomy times for commodities, few are more beaten down than nickel. While metals like copper and aluminum trade at low levels, they are at least still up from depths reached during the global financial crisis, especially after a rally in prices in recent weeks.

Not so nickel, a key ingredient in stainless steel, which slumped to a 13-year low last month and remains well below its prices in 2008 and 2009 despite a partial recovery since then.

The slump has confounded market participants who had expected nickel prices to remain buoyant for some time after Indonesia, the world’s largest supplier of nickel ore, imposed an export ban in 2014 that is still in place.

Instead, three-month nickel futures prices on the London Metal Exchange are now around $9,290 per metric ton, nearly one-third their level in May 2014 and one-sixth of the peak hit in May 2007.

“Global consumers of nickel built up significant stockpiles of refined nickel and nickel ore in the run up to Indonesia’s ore export ban, in anticipation of a severe subsequent tightening of the market,” said John Davies, head of commodities research at BMI Research. “However, this tightening has been extremely slow in materializing.”

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