Demand for Nickel has taken a hit as the stainless steel sector is facing trouble on account of slowing demand in the domestic as well as international markets. Nickel is mostly used to produce Austenitic Steel which is corrosion resistant. The problems of domestic steel makers are that the prices have fallen in international and domestic markets. India is witnessing rise in imports of steel from China, Taiwan and Korea, as it is costing less. On the other hand Indian steel makers have entered into long term agreements for the supply of coal.
Steel makers have slashed the prices every now and then and the situation is likely to continue in the medium term.Nickel prices in the futures markets are now at Rs 586 per kg up Rs 3. The peak was attained during the month of March, when the prices were hovering in the range of 2250 per kg. Supports for the contract are at 570 levels with Resistances at Rs 628.
Nickel miners have cut production by just under 140,000 metric tons so far this year because of a poor demand outlook as well as unplanned disruptions, but there is still the potential for a market surplus next year, Macquarie Bank said in a note. The problem for the nickel market in 2009 is that there is still the potential for a 200,000-ton supply rise in production from the restart of lost 2008 production and the ramp-up of existing and new production capacity.
Expectations for nickel demand growth for 2009 are less than 60,000 tons, "so the potential surplus without further action to adjust production is enormous," the bank said, expecting a surplus of 20,000 tons in spite of existing production cuts and another 100,000 tons in expected cutbacks and disruptions.
Steel makers have slashed the prices every now and then and the situation is likely to continue in the medium term.Nickel prices in the futures markets are now at Rs 586 per kg up Rs 3. The peak was attained during the month of March, when the prices were hovering in the range of 2250 per kg. Supports for the contract are at 570 levels with Resistances at Rs 628.
Nickel miners have cut production by just under 140,000 metric tons so far this year because of a poor demand outlook as well as unplanned disruptions, but there is still the potential for a market surplus next year, Macquarie Bank said in a note. The problem for the nickel market in 2009 is that there is still the potential for a 200,000-ton supply rise in production from the restart of lost 2008 production and the ramp-up of existing and new production capacity.
Expectations for nickel demand growth for 2009 are less than 60,000 tons, "so the potential surplus without further action to adjust production is enormous," the bank said, expecting a surplus of 20,000 tons in spite of existing production cuts and another 100,000 tons in expected cutbacks and disruptions.
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