LONDON, Jan 30 (Reuters) – A combination of surging China imports, tighter supplies and fund interest are expected to sustain prices of stainless steel ingredient nickel, which have reached their highest level in more than two years.
Benchmark nickel on the London Metal Exchange hit $14,040 a tonne on Monday, the highest since May 2015 and a gain of more than 55 percent since June.
“The fundamental story for nickel has started off well and it is looking good for at least the next couple of years,” said Wood Mackenzie analyst Adrian Gardner. Wood Mackenzie forecasts a deficit of between 80,000-90,000 tonnes this year following a deficit of similar levels in 2017.
The shortfall is likely to be particularly acute in China, which accounts for about half of global consumption estimated at around 2.1 million tonnes this year but where an environmental crackdown has shut capacity.
It is expected to ramp up imports. Latest data shows China’s nickel imports more than doubled in December from a year earlier to 41,315 tonnes.
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