Nickel is one of the leading indicator metals when it comes to economic health. The metal, used chiefly as a component of stainless steel, tends to be one of the first metals to fall when times are bad, as well as one of the first to rebound as soon as the economy improves. The metal took a swift and dramatic tumble in concert with the economic collapse, retreating from a US $35,000 a tonne high of a year ago to about US $9660.

Miners anticipate that global demand in the near term will be at best stable; therefore there is hope that the vast amount of mine closures will be enough to equalize the supply-demand balance. Nickel premiums in the United States have declined after holding steady since late last year as orders remain off by about 50 per cent. Stocks in London Metal Exchange warehouses continue to climb. Current global stockpiles are around 100,000 tonnes, equivalent to about 8 per cent of global demand.

According to market sources, the world’s transaction prices of nickel based stainless steel appear to have bottomed out. The current price level stands at US $2,000 per tonne Freight on board in Japanese exports of nickel based stainless CR sheets to China, down by US $100 from February. With prices of nickel based stainless CR sheets tied to nickel prices, it follows that they will respond accordingly to every advance in LME nickel prices. Therefore, the current level of Japanese export prices indicates that they have bottomed out. Taiyuan Iron & Steel Group Co changed its announcement of stainless steel prices for domestic sales from the usual monthly practice to a weekly one from March 9. At the same time, the company reduced the asking price of nickel based CR sheets by US $117.

In contrast, stainless steel manufacturers in Europe are trying to increase the base price of nickel based CR sheets. Their counterparts in the USA are on track to take similar moves. European and US stainless steel producers favour executing price increases on the argument that they can no longer survive at current low prices.