Standard Chartered raises 2007 nickel price forecastadmin
Standard Chartered said it raised its nickel price forecast for 2007 as it continues to see delays in new mining projects expected to come on stream this year.
The bank now sees benchmark LME nickel contracts for 3 month delivery averaging 32,200 usd a tonne this year, from a previous forecast of 29,875 usd a tonne.
“There’s a lot more risk to upside if planned projects don’t come on line,” said Standard Chartered analyst Tariq Salaria.
He added while demand for stainless steel should slow in the second half, this will not be enough to cushion nickel prices should new supplies not come on stream as expected.
Stainless steel demand accounts for about 70 pct of total nickel consumption.
“The ability of the market to quickly substitute away from grades of stainless steel which are highly nickel intensive and bring new supply to market is limited and therefore prices have solid support near term,” he said.
Nickel stocks in LME warehouses are at critically low levels at present, equivalent to only one day of consumption.