The selling in stainless steel material Nickel looks unending. The
prices on London Metal Exchange were down by almost 1 percent in the
intraday moves and slipped below $ 16300 per tonne. China is facing
problems of oversupply in the markets that is pressurizing the metals.
The latest data of stainless steel imports showed that China imports of
stainless steel products was 49579 tonnes, down 17.11% in February 2013.
China exported 168418 tonnes of stainless steel products in February
down 16.57%.Recently, China major steel player Baosteel has said that the oversupply problems in the country will extend in the year 2013. China crude steel production was estimated at 920 million tonnes. The total utilization rates were expected to slip to 75 percent in 2013 from 78 percent in the year 2012. Raw material costs in China are rising while demand is slow from construction sector.
Nickel is the primary raw material for producing austenitic steel grades. A slowdown in steel market means a decline in demand for Nickel as well. The substitution of Nickel from Pig iron is less likely to impact the markets due to lower prices but the general intake of consumers is so slow that markets are facing tough times.
Nickel has seen a jump of 20 percent in inventories this year that are now at 166716 tonnes. The estimates from Nickel groups suggest that commodity will turn into surplus this year. Price wise Nickel has corrected by 4 percent on LME this year.
MCX Nickel breached Rs 900 per kg yesterday and continues to trade below this level on 3 April. The prices are at four month lows of Rs 891 per kg. Supports for the contract is at Rs 875 per kg while Resistance is at Rs 895 per kg.
Source by Commodity Insights
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