Nickel supply shock, ad-hoc – by Tim Treadgold (Mining Journal – December 14, 2016)

From less than US$4 a pound just before Christmas last year the nickel price has risen by more than 30% to around US$5.13/lb with a recent peak of US$5.24/lb earlier this month.

But, if you look at a graph of the nickel price over the past 60 days it is obvious that traders are uncertain whether to bid the metal higher, or push it lower, with US$5/lb the price around which they’re circling while politicians in the Philippines (and Indonesia) decide whether to encourage or discourage nickel exports to China.

As might be expected when it comes to political factors investment banks are uncertain which way nickel will move when the Philippines Government releases the delayed final audit of its mining industry, perhaps as soon as tomorrow (December 15).

Citi, in the latest edition of its Metals Weekly report, reckons that the Philippines Government has “little appetite” to enforce more mine closures of the sort forced on the industry in August, a view that reinforces a Mining Journal story two months ago (Nickel’s days are numbered).

If that view is correct then the nickel-price recovery could be threatened because some of the increase in the nickel price can be attributed to mines in the Philippines being closed because of alleged environmental and safety breaches, with stronger demand from China’s steel industry another factor in the price rise.

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