It was said "LME stocks are massive at 439,140 tonnes but they are not telling the whole story either because all the indications are that surplus is also piling up in China."
Could you understand this Nickel Stock chart? No? Read and understand this
article is critical for a few things about nickel supply and demand chain:
1. Reduction rate of supply against that of demand Rate: Supply reduction rate is much slower than that of demand reduction
2. Financial rather than industrial demand of Nickel in China. Piling up happens not just in LME but China too.
3. Ghost stocks in China has being built up due to collateral metal trading which seems flourish for nickel. 4. This ghost stocks can just as easily head back into the international market as into the domestic Chinese market so that we can see LME stock pile up suddenly which make too many wonder where it comes from.
5. Without the Chinese ghost stock, LME stockpile would be much, much higher still, which tell part of reason why nickel price could be down to level at 2003 now or maybe later.
6. With producers facing off in a game of last-man-standing, surplus metal is still accumulating, meaning that even if supply starts contracting, the impact will be deadened by stocks overhang.
It seems we could not expect nickel price too much in short time, such as in months even quarters. MBN has to live with its best friend, the depreciated BR, for its survival. Hope we could be lucky enough that BR will keep its trend in a year or longer, which seems true.