NEW YORK (Commodity Online): Nickel has been one of the worst performing metals at the London Metal Exchange (LME) for the past several months. But with prices at their lows and a possible surge in buying in the vicinity, prices may stage a strong rebound. In fact, nickel could very weel outperform gold in coming months.
-China is the largest consumer of nickel in the world. With Chinese economy slowing, many analysts predict that the central bank will engage in monetary easing, an environment which is bullish for metals.
-Almost 65% of nickel production is consumed by the stainless steel industry. And China is the biggest consumer of steel in the world. Chinese steel output rose by 8.9% to 683.27 million MT in 2011, latest data from the National Bureau of Statistics showed. The Chairman of China Iron and Steel Association, Zhu Jimin had earlier said that Chinese consumption was expected to grow 4% to 700 million MT in 2012.
In such a bullish outlook for steel, nickel will obviously enjoy the benefits as well.
-Daniel Brebner, analyst with the Deutsche Bank A G says in a report that the stainless steel industry “could witness considerable restocking into early spring” on a better than expected economic data from the US and stability in Europe.
In fact, Brebner goes on to say that Nickel will outperform Gold in the next 12 months.
At the LME, nickel is trading bellow $20,000/tonne.
