China March Nickel Imports Rise On Yr, Fueling Stockpile Talk
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BEIJING, Apr 21, 2009 (Dow Jones Commodities News via Comtex) -- Nickel imports rose 29% on year to 12,620 metric tons in March, fueling speculation that China's State Reserve Bureau has stepped into the market amid improving stainless steel prices.
The stockpiling agency is said to be considering purchases of up to 20,000 tons of nickel, and may already have bought 6,000 tons, analysts said.
The improvement in nickel's outlook has prompted Jinchuan Group Ltd., China's largest nickel producer and the world's fourth largest, to raise its nickel price this week for the sixth time this month, Barclays Capital said Wednesday.
"In our view, Chinese nickel prices are being driven higher by a combination of factors including a pick-up in buying following speculation of potential State Reserve Bureau stockpiling of up to 20,000 tons and increased stainless steel production," Barcap said.
"Market chatter suggests that (the bureau) may have bought 6,000 tons of nickel in recent weeks and further buying is possible," said Dan Smith of Standard Chartered.
Speculation has persisted for months that the bureau was eyeing nickel.
The agency had discussed buying nickel in February from Jinchuan but the two sides disagreed on price, the smelter's chief executive Yang Zhiqiang told Dow Jones in March.
The pattern of imports thereafter suggests the agency could have sourced from abroad.
Nickel imports jumped 66% on month to 12,690 tons in February, from 7,622 tons in January.
Still, not all analysts agree the bureau is at work on nickel.
Fan Runze, an analyst with state-owned metals consultancy Antaike, said he believed speculators were driving up nickel prices rather than the bureau.
He said it would be an inopportune time for the bureau to be moving on nickel.
Domestic nickel prices have risen 24% to CNY112,500/ton Wednesday from CNY91,000/ton in early February.
Globally, nickel's prospects remain mired in weak demand.
"The industry continues to suffer from extremely weak demand and the availability of recently mothballed smelter capacity will prevent tightness from emerging for the foreseeable future," Smith wrote. "The industry has a long way to go before consumers need to start worrying about supply shortages."
In China, however, an estimated cutback in nickel pig iron production this year to 35,000 tons from 67,000 tons in 2008 could prove beneficial for nickel prices.
"Improving sentiment about China and restocking activity also seem to have played a major role in helping to take nickel prices higher," Smith said.
Major stainless steel producer Tisco has started to raise prices in China, taking its hot-rolled coil stainless price up 5% in mid-April to CNY14,920/ton, Standard Chartered said.
-By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588 5848; chuin-wei.yap@dowjones.com
(END) Dow Jones Newswires
04-21-09 2319ET |
