NICKEL THE EXCEPTIONThe one base metal where bull reality and...

NICKEL THE EXCEPTION

The one base metal where bull reality and bull narrative have credibly fused is nickel.

China?s imports of refined metal have remained solidly robust through the early part of this year. Net imports rose by 26% to 53,000 tonnes in the Jan-April period.

Moreover, imports have increased at a time of rising domestic production. The official Chinese figures show refined production rising by 30% during the same period. But they do not include the fast-expanding nickel pig iron (NPI) sector.

The best proxy for what is happening to NPI output is what is happening to imports of the ore used in the production process.

Those from Indonesia, favoured by the new generation of electric arc furnace NPI producer, have surged by 52% so far this year, totaling over 1.6 million tonnes in both March and April.

High domestic production and robust imports suggest strong nickel demand from the country?s stainless sector.

THE ONLY WAY IS UP?

There is a major question mark as to whether the recent pace of refined nickel imports can be maintained if, as is widely expected, the restocking impetus in the steel sector fades and NPI production continues expanding.