The monthly Stainless MMI®, which was just released for March, has continued from its long descent at the top to a registered value of 78 in March. This is a decrease of 3.7 percent from 81 in February. This drop in nickel prices has now lasted a record 10 months since its meteoric rise in early 2014. Nickel is hovering around its lows of 2014.
Most analysts agree that nickel’s fundamentals remain positive, at least on the supply side. The Indonesian authorities haven’t changed their minds and the ban on exports of nickel ore to China there hasn’t changed. The flows of material between the two countries have disappeared.
A surge in nickel ore supply from the Philippines and the fact that China’s nickel pig-iron producers have built up significant quantities of stocks prior to the January 2014 ban compensated for the supply decrease. Indeed, the ore ban in Indonesia led to a 37% increase in nickel mining in the Philippines last year.
Although most analysts are focusing on the supply side, some believe the key for the nickel price is directly related to nickel’s demand expectations. Those expectations are low at this point, and this is weighing down nickel prices. The nickel price might be punished regardless of the supply constraints. Prices may continue to decline no matter what happens on the supply side.