Industrial metals: Recovery rally, but nickel does not participate

by David Fleschen

The recovery in metal prices, which began on Tuesday afternoon, continued yesterday and continues this morning. Copper trades at around $ 5,800 a ton, nearly $ 300 above its low of the day before yesterday. The much scolded zinc spiked nearly 5% to just over $ 2,300 a ton. The price increase of the metals, which accelerated yesterday with the start of US trade, might be related to the higher risk appetite of market participants and the somewhat weaker US dollar. In the trade dispute between the US and China, there is currently some optimism again: The talks on a personal level should now take place in early October. In addition, the Chinese State Council called for a timely reduction of the reserve requirement ratio for banks in order to help the economy.

The recent increase in nickel did not pick up yesterday and even drops to $ 17,600 a ton this morning. According to information from the Ministry of Energy and Mines, miners in Indonesia can apply for new export quotas for nickel ore, which should be valid by the end of the year. These are to be granted according to the ministry data in addition to the already existing export quotas. It is therefore expected that miners will try to export as much nickel ore as possible by the end of the year before the export stop comes into force on 1 January 2020. Some market observers are already talking about an expected supply of nickel ore from Indonesia. Whether it actually gets that way remains to be seen. As in the run-up to the last export ban on untreated ores at the beginning of 2014, China, the largest buyer of Indonesian nickel ore, will again try to import as much nickel ore as possible.
Source: Commerzbank Research, Photo: Fotolia

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