A tight market has seen the price of nickel rise to the $2.50(US)-per- lb level and Shearson Lehman Brothers says there may still be some steam left in the nickel market’s rally.
Producer stocks have fallen on the London Metal Exchange — perhaps by as much as 15,000 tonnes during the first six months of this year, Shearson says — and a further decline is expected during the third quarter following the summer shutdowns of many producers.
At Sudbury, Ont., Inco Ltd. shut down production for four weeks, and at Thompson, Man., company miners had a 5-week break. Falconbridge Ltd. shut down its Sudbury mining operations for July and August.
Dave Allen of Inco said his company’s current nickel inventory “is down to a working level” and that Inco has been turning away new business since the spring of this year. At Falconbridge, Peter McBride said a higher demand for the base metal has resulted in a low nickel inventory level.
The increase in demand for nickel this year is attributed in large part to stainless steel producers in Europe who are turning out the product in record numbers. A shortage of stainless steel scrap has also boosted demand for primary nickel.
Stainless steels account for about 50% of nickel consumption; the base metal is also used in nickel- base alloys, electroplating, alloy steels, foundry products and copper-based alloys. As an alloy agent, nickel is part of about 3,000 different alloys.
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