Metal prices: Positive start into the week

Metal prices start the trading week positively. Copper rises to a 5-week high of around $ 5,250 a ton. Nickel is significantly more expensive than copper, namely by 3% to USD 12,400 per ton. This is also the highest level in five weeks. Nickel is benefiting from a sharp rise in the price of stainless steel in China (the price of cold-rolled stainless steel has increased by 15% since the beginning of the month) as demand increases again. Traders in particular are replenishing their stocks. This is probably another sign that the Chinese economy is on the way to normalization. At the end of last week, the state research institute Antaike had already warned that Chinese nickel pig iron production could fall by 25% to 450 thousand tons this year, among other things because the corona measures did not allow enough nickel ore to be processed.

According to this, the nickel ore stocks in the country's ports were already reduced by 25% or 4 million tons in the first quarter. The enthusiasm for the price increase of nickel could soon be over. Although the International Study Groups meetings are canceled, new supply and demand estimates are expected to be published. And then the International Nickel Study Group should turn its previous estimate of a supply deficit for 2020 into a surplus. Because it is likely that the coronavirus has a stronger (negative) impact on demand than on supply. For the other metal markets, the already expected surpluses are now likely to be even larger. This could stop or at least slow the recovery in metal prices.

Source: Commerzbank Research, Photo: Fotolia