Nickel dips 17% on high stocks

Spot nickel prices dropped 17 per cent in the domestic metals market in the last one month, reflecting a bearish trend in the international market. The silvery white metal is currently quoted at Rs 1,400 a kg compared with Rs 1,720 a kg a month ago.

The decline is mainly attributed to a similar price movement on the London Metal Exchange (LME), which saw a 21 per cent fall from $36,950 to $29,325 a tonne during the period under review.

Nickel, which is largely consumed by the stainless steel industry, witnessed its inventory doubling in the LME-registered warehouses as leading producers across the world deposited more stocks in the warehouses.

The demand for the metal slid as the stainless steel industry looked for a substitute for the costly nickel. The industry consumes approximately 70 per cent of the world's nickel production.

The steel and other non-ferrous alloy producers use about 20 per cent and 6 per cent of nickel respectively for plating and in other chemical applications. The demand for cost-effective utensils is picking up fast, boosting the demand for nickel. India is a net importer of the metal.

On the LME, nickel prices were down by $125 a tonne to close at $29,325 on Tuesday from $29,450 a tonne on August 3. During the same period, the domestic market saw the metal price dropping by Rs 85 a kg to close at Rs 1,400 from Rs 1,485 a kg. On the National Commodity & Derivatives Exchange, the prices of the August and September contracts declined by Rs 289.97 and 352.75 a kg respectively during the last one month.

On the Multi Commodity Exchange (MCX), the August contract fell by Rs 305.60 a kg in the past one month to close at Rs 1,203.50 a kg on Wednesday. The September and October contracts declined by Rs 295.40 and Rs 50.20 respectively during the same period.

The total nickel inventory in the LME-registered warehouses was 17,826 tonnes on Wednesday, adding about 1,152 tonnes on Tuesday and 8,856 tonnes since the beginning of July.