Nickel to trade in Rs 840-1150 range: Ventura

Ventura Commodities has come out with its special report on Nickel. The research firm says in the medium-term; expect Nickel prices to remain range bound, in Rs. 840-1150 range for 2013.

According to International Nickel Study Group (INSG) global refined Nickel markets was likely to be surplus of 50000 metric tonnes in 2012 before to be in further increasing to 70000 metric tonnes in 2013. The production of refined Nickel is further expected increase to 1.78 million tonnes in 2013 from 1.69 million tonnes in 2012, as per INSG. Nickel market is on the cusp of facing significant surpluses due to a tidal wave of new production from RKEF (Rotary Kiln/Electric Furnace) based NPI producers in China, and HPAL and Ferronickel projects in the rest of the world. Pig Iron is the one of the greatest threats to the projected rally in Nickel because of its growing, production. Output is expected to be at least 300,000 tons in 2012 and 330,000 tons in 2013.

Fundamental Outlook for 2013:

Our view of a cyclical pick-up in refined nickel demand in 2013 remains unchanged. However, nickel remains in abundant supply, both from traditional ferro-nickel and the new HPAL technology, but also from low-cost nickel pig iron output in China. Prices are expected to remain range-bound and increasingly determined by the marginal cost of production of Chinese nickel pig iron.

Technological improvement is expected to continue to lower the upper end of the nickel cost curve. We are bullish on short-term prices due to setbacks at several ramp-ups and existing operations and improving demand outlook, particularly from stainless steel. In the medium-term, we expect prices to remain range bound, in Rs. 840- Rs. 1150 range for 2013.

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