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To: Marshhawk who wrote (2625)	6/14/2000 11:10:00 PM
From: Marshhawk	Read Replies (1) \| Respond to of 2769

(MB) - Nickel price starts to stabilise Bloomberg News Jun 14 2000 5:02PM ET June 14 (Metal Bulletin) - LME nickel prices began to stabilise mid-week, with gains seen across the whole LME base metal complex. The three months price broke through $8,000 per tonne basis on June 14 after dropping to lows of around $7,800 per tonne in morning trading the previous days. Traders believe that this stabilisation could mark the beginning of a gradual price increase for nickel. "There is still a fear of being short in the market and the stocks are still low," said one trader. "The price should go back up to $8,500-9,000 but I don't think we shall see $10,000 again unless something major happens" he said Analysts are now predicting that the bull run is over for nickel. "In the second half of the year it is likely we will see a supply surplus which would cause prices to ease off," said one analyst. Although LME stocks are still declining - and were reported another 60 tonnes down to 21,540 tonnes on June 14 - tightness in the market is expected to ease off a great deal in the third quarter when demand is traditionally lower. "With more material coming out of Russia in the third quarter and an abundance of secondary nickel, there is a mid-term potential for nickel to sell off," the analyst said. The recent price drop has done little to ease backwardation and which remains at $240-270 on the cash to three months spread. Traders say that this is likely to keep premiums high in the physical market. Premiums for 4x4 Rotterdam material were reported at around $40 per tonne over LME. European stainless scrap merchants have been forced to concede price reductions on the back of the recent drop in LME nickel price. Business is reported at around $750-760 per tonne for 18/8 solids and around $600-630 for 18/8 turnings. Merchants say that the availability of material is dwindling, as smaller suppliers are reluctant to sell at a price that is falling on a daily basis. "The question is - where will [the nickel price] stabilise?" said one Dutch-based merchant. A major German processor fears that smaller merchants are holding off the market in expectation of better prices, a move he says is thinning supplies. "The smaller suppliers have made their money but the dropping price is holding them back," he said. "We could normally rely on material from Russia and Ukraine but the drop in prices here is too steep for them, especially as they have a higher nickel content in their scrap." Stainless scrap from Russia and Ukraine usually contains 10% nickel, explained the merchant, and the sale price into Europe has dropped in the last couple of weeks from $1,030 per tonne to around $860. Additionally, observers say that stainless scrap markets in the Far East have also dropped off in recent weeks and put the fall in demand down to the excitable period of buying in that region earlier in the year, which has left stock levels healthy for the moment. Last week a report by the research arm of Macquarie Bank said that the use of nickel-in-scrap rose by 20% year-on-year in the first quarter this year. "Some steel mills have no interest in primary nickel and are using as much as 90% scrap for their feed," another analyst said. Metal Bulletin newsroom, London Tel +44 207 827 9977 Fax +44 207 928 6892 New York Tel +1 212 213 6202 Fax +1 212 213 6273 -0- (BN ) Jun/14/2000 21:02 GMT hi