METALS-Deficit expectations gas nickel’s climb to six-month peak

* Stainless-steel costs rise, shares construct in China

* Copper down on profit-taking on lengthy positions (Recasts, provides remark, modifications dateline from Beijing)

By Pratima Desai

LONDON, March 4 (Reuters) – Nickel costs climbed to a six-month peak on Monday as expectations of a fourth consecutive 12 months of provide deficit have been bolstered by indicators of sturdy demand from chrome steel mills in China.

Benchmark nickel on the London Steel Change (LME) was up 0.5 p.c at $13,260 a tonne by 1037 GMT, having touched its highest for the reason that finish of August at $13,405. The value is up 24 p.c this 12 months, the very best performer amongst LME metals.

“Finally the nickel market has been in deficit for 3 years operating and we predict one other deficit this 12 months,” mentioned Roskill senior analyst Olivier Masson.

“The nickel value was most likely oversold on the finish of final 12 months, when the market was worrying about international commerce,”

TRADE: The commerce dispute between China and the USA has fuelled concern about international progress and demand, undermining sentiment in metals markets.

DEFICIT: Knowledge from the Worldwide Nickel Examine Group exhibits the nickel market deficit at 46,000 tonnes in 2016, 115,000 tonnes in 2017 and 127,000 tonnes final 12 months.

World nickel demand is estimated at about 2.Four million tonnes this 12 months. Of that, about two thirds is destined for chrome steel mills, largely in China. “The value of chrome steel continues to rise (and) provide of ferronickel could be very tight,” GF Futures mentioned in a notice, including that Wuxi Stainless Metal Change inventories had risen by greater than 10,000 tonnes, or 4.2 p.c, for the reason that first half of February.

STOCKS: Nickel shares at 196,542 in LME-registered warehouses have almost halved for the reason that begin of January final 12 months, whereas cancelled warrants — steel earmarked for supply — stand at 37 p.c. MNISTX-TOTAL

Inventories in warehouses monitored by the Shanghai Futures Change are beneath 10,000 tonnes and have fallen almost 40 p.c for the reason that center of November. SNI-TOTAL-W

SPREADS: Merchants say the low cost for the money over the three-month contract is an incentive to purchase nickel and promote it ahead on the LME. The low cost, or contango, of about $80 a tonne is sufficient to cowl financing prices and go away a wholesome revenue. MNI0-3

PROFIT-TAKING: Costs of copper are down on profit-taking by funds with lengthy positions betting on larger costs.

Merchants say the market has been lengthy on copper for a while, whereas others say the premium for the money over the three-month contract at $34 a tonne ought to entice steel to LME warrant, relieving among the tightness.

PRICES: copper was down 1.Four p.c at $6,386 a tonne, aluminium fell 1.9 p.c to $1,882, zinc slipped 1.2 p.c to $2,750, lead ceded 1.1 p.c to $2,119 and tin was down 0.Three p.c at $21,550. (Reporting by Pratima Desai Enhancing by David Goodman)

Author: Maxwell C.

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