Nickel hits 2-year low on soft stainless steel demand

Tag : Steel Stainless

By Julie Crust and David Sheppard
LONDON (Reuters) - Nickel fell to a two-year low below $19,000 atonne on Thursday on weakening demand from stainless steel mills,while copper eased on growth fears.
Nickel for three-month delivery fell more than 5 percent to $18,875a tonne, its lowest since June 2006, before recovering to trade at$19,050 at 2:31 p.m. GMT (10:31 a.m. EDT).
On Wednesday it closed at $20,000 a tonne, after falling 2.7percent on weaker demand from stainless steel producers, whichaccount for about two thirds of global nickel demand.
"There has been increasing evidence of weak demand from thestainless steel sector in the third quarter," Calyon analyst RobinBhar said.
"$20,000 a tonne was viewed as a firm floor for prices. Below herewe could see nickel pig iron producers in China cutting productionwhich could be a regulatory mechanism for the market."
Stocks of nickel in LME warehouses rose 180 tonnes to 43,368,although they have fallen by about 17 percent over the last threemonths.
"We will see how long the decline in nickel stocks will last,"Simon Toyne, analyst at Numis Securities, said.
"Markets are still soft for stainless steel with demand gettingweaker in Europe." Continued...