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Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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May 2019 | Base Metals


Nickel: Fundamentals still largely resilient


With exchange stocks of nickel still being drawn down relentlessly, this market appears to remain in deficit. Nickel prices should be well placed to rebound strongly when positive sentiment returns, risk aversion subsides and the fundamentals reassert themselves.

Amid risk-off selling, exchange stocks fall unrelenting... Nickel has not been immune to the extended base metals sell-off triggered by the re-escalation of US-China trade tensions. Even though its cash/three-month spread has tightened to a contango of $36 per tonne, LME nickel stocks continue to slide to successive multi-year lows, with 834 tonnes of outflow already this week after a net drawdown of 3,324 tonnes last week. That takes the total on-warrant to 168,774 tonnes – the lowest level since April 2013. And more metal is likely to be leaving given that cancelled warrants remain elevated at 65,628 tonnes, or almost 40% of the total. In China, SHFE nickel stocks remain...

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