Nickel Posts Longest Losing Streak Since 2001 on GlutJoe Deaux
Nickel capped the longest slump in 13 years as inventories climbed to an all-time high, signaling ample supplies as the economy slows in China, the world’s top metals consumer.
Stockpiles monitored by the London Metal Exchange climbed 15 percent since Sept. 1, reaching a record today. Prices have slumped for seven straight weeks, the longest streak since July 2001. Lower costs for nickel, used in stainless-steel production, can benefit consumers such as car makers and appliance manufacturers, including Whirlpool Corp.
Nickel fell into a bear market last month on signs that output will meet demand even after Indonesia, the world’s largest producer of the metal from mines, implemented a ban on exports of unrefined ore in January. Prices surged as much as 56 percent this year to a peak in May on concern the restrictions would limit supplies. Instead, the Philippines ramped up its shipments to China, where a slowing expansion threatens consumption.
“Nickel was overbought by investors earlier in the year, but the market has turned against the metal now that global growth is looking less exciting,” John Meyer, an analyst at SP Angel Corporate Finance LLP in London, said in a telephone interview. “This, for us, is going to be yet another year of metal surpluses.”
On the LME, nickel for delivery in three months dropped 0.9 percent today to $15,010 a metric ton, capping a 23 percent plunge over seven weeks. Prices are down 31 percent from this year’s peak on May 13.
Inventories tracked by the LME climbed 0.7 percent this week to 378,132 tons. The supplies gained for a 16th straight week, the longest stretch since January, and are up 45 percent this year.
Exports of nickel ore from the Philippines to China rose 27 percent in September from a year earlier to 4.52 million tons, customs data showed Oct. 22. The shipments reached a record 5.33 million tons in August, helping to make up for tighter supplies from Indonesia.
China’s economy will probably grow 7.3 percent this year, according to a Bloomberg survey of analysts. That would be the slowest since 1990. The nation is the biggest stainless-steel producer.
“Chinese nickel and stainless-steel markets are not very strong,” Michael Widmer, the head of metals research at Bank of America Merrill Lynch in London, said in a telephone interview. “On the back of that, you don’t have the buying support from the Chinese that would be needed to balance the market, and as a result you have a build in these LME inventories.”