After slumping more than any other industrial metal, analysts and traders say the worst may be over for nickel as restrictions on shipments from Indonesia, the biggest producer, diminish a worldwide glut.
Indonesia banned some ore exports from May 6 and imposed a 20 percent tax on the remainder to spur the development of its refining industry. The nation’s output will drop for the first time in four years in 2013, slashing global supply growth to 0.2 percent, from 4.9 percent in 2012, Morgan Stanley estimates. Prices will average $20,000 a metric ton in the fourth quarter, an increase of 23 percent, the median of 16 analyst estimates compiled by Bloomberg shows.
The metal fell 13 percent this year on prospects for the biggest surplus since 2009. Morgan Stanley now predicts the glut will peak in 2012 and Barclays Plc says prices should rally toward the end of the year on strengthening demand from stainless-steel makers, the biggest consumers. The rebound may not happen until then as China runs down record ore stockpiles accumulated in anticipation of the Indonesian ban.