Nickel prices rally to US$10,000/t (US$4.53/lb) as market sentiment turns more positive. The rally is expected to continue through August.
The source of this month's optimism is a stronger stainless steel segment in China. Q2 production cuts have come to an end, indicative stocks are down to their lowest level since January 2016 and higher stainless prices should boost new orders. Furthermore, the re-entry of Delong and reconfiguration at Desheng could mean that austenitic stainless production will increase substantially in H2/2017. This coincides with the closure of one NPI smelter in Indonesia, signalling that more suspensions are possible. Furthermore, President Duterte has re-ignited the threat to Filipino mines by raising the spectre of curtailing exports in favour of domestic processing.
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As global demand weakens and commodity prices fall, we're seeing a challenging environment in the metals and mining industry. Mining companies are increasingly coming under pressure to reduce operating costs, causing many to shift their strategic planning, delay new investments and look to long-term future growth.
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Commodity market report | Jul 2017
Global nickel short-term outlook July 2017
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