NEW YORK (Commodity Online): Nickel prices may be set for a rebound, after the horrendous price crash has made nickel an attractive substitute for Nickel-Pig-Iron (NPI). LME nickel crashed from a hight of around $29000/tonne early this year to trade at below $20000/tonne in October, a decline of over 30%.
NPI has been a substitute for nickel due to its low cost and contributed to the fall in nickel demand and prices. However, the current cheapness in nickel has spurred demand. With nickel prices below $20,000/tonne, NPI producers may cut down on production.
In fact, as mills boost their nickel purchases, Nickel may rise by as much as 16% in 2012, says Societe Generale. Credit Suisse have also raised their nickel price forecast by 5% for 2012 and as much as 28% in 2014.
The immediate effect can be seen n Baosteel Group's decision on buying more refined nickel since NPI has become expensive. Baosteel is China's biggest publicly traded steelmaker.
