The cost of Nickelused in the production of stainless steel continues to decline. This indicator is influenced by two factors. One of them is the increase in the production of Philippine and Indonesian raw materials for the production of Nickel. The second factor is the acquisition of Nickel ore by Chinese manufacturers. China is the largest consumer of stainless steel. But now China is becoming a smaller amount of ore. Thus it is fanning fears about overproduction. Accordingly, for Nickel is a downward pressure. The cost of three-month contracts for Nickel futures LME is now about 9 thousand USD. This indicator compared to the February figures reduced by 20%.
Until the spring of the current year the expected increase of cost of Nickel. It was based on the hopes entrusted to the American boom and Chinese infrastructure investment. Accordingly, investors expected the increase in demand for Nickel. Moreover, the situation has changed in the Philippines. This country produces 20% of the metal from global metal production. However, the new President, Rodrigo Ducere reviewed the activities of the Nickel mines. February has touched visiting some of the mines. The goal was the reduction of production capacity of the Philippines by about 50%. Such a move is expected to strengthen the protection of the environment.
The majority of industry representatives were hoping that the price of Nickel will continue to increase gradually. In April, a study group, which included producers of metals, spoke about the upcoming shortage. According to them, he was supposed to be 40 thousand tons. However, concerns about the deficit significantly weakened after the resumption of Indonesia exports of raw materials.