Nickel’s rally is only just getting started, making the metal an attractive bet for investors, according to Jinchuan Group, China’s biggest producer of the refined metal.
Tightening global supplies because of a mining clampdown in the Philippines and rising demand from the stainless steel industry in China will push prices higher even after they climbed 35 percent from February lows, Chairman Yang Zhiqiang wrote in a statement on the company’s website. China consumes about half of the world’s supply and the Philippines produces a fifth of it.
“Nickel’s advance is just the beginning of a long bull run, with current prices still around multi-year lows, making the metal a promising investment,” Yang wrote.
The market will see shortages every year through 2020, with the deficit at 65,000 metric tons this year, Yang said, citing company data. Low prices have hurt most global producers and forced some mines and smelters to shutter, he said in the statement Wednesday.
While prices climbed to the highest in a year this month and traded at $10,285 a ton on Wednesday, they are still about 80 percent below the record of more than $50,000 in 2007. Goldman Sachs Group Inc. and UBS Group AG also expect prices to advance as mines close in the Philippines because of the environmental crackdown by President Rodrigo Duterte.
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