Nickel continued to lose ground in the past month, with spot prices falling from around US$16,155 a tonne on the London Metal Exchange to $15,320 Monday, according to prices listed on Metal-Pages.
So far this year, the metal has slid over 16 percent. That’s partly due to the Eurozone debt crisis and weaker economic growth in China, but another contributing factor is a decline in stainless steel demand. Nickel is a key ingredient in stainless steel.
According to recent figures from HSBC, global stainless steel production fell 2.8 percent in the first quarter of 2012 from a year ago. The bank also advised that, in light of lower demand, steel mills in China and Taiwan are aiming to sharply cut their stainless steel production. That will put further downward pressure on nickel prices.
In more positive news, the recent weakness may soon run its course: HSBC believes nickel prices will be supported in 2013, and will rise back above $20,000 a ton by 2014.