Nickel prices rose to record levels before a change in LME
rules resulted in a decline. Records were established for
daily, monthly, and yearly cash settlement prices. Inventories
rose sharply from a range of 3000-5000 t until mid-
May, reached 20 000 t in August, and fi nished the year at
nearly 48 000 t.
The author projects that prices in 2008 will average
between US$26 000/t and US$30 000/t. While
high prices should translate into reduced demand, the
increase in stainless steel production capacity is expected to
continue in the short term. Even with increased production
of low-nickel and no-nickel stainless steels, primary nickel
demand and stainless steel demand are a function of world
economic growth. Increased nickel production is projected
in 2008 as new projects begin, starting with Ravensthorpe-
Yabulu early in the year and Onça-Puma and Goro in late
2008. Sustained very high prices have created very large
incentives for existing producers to expand and for new
producers to enter the market.
Some stainless steel producers in Europe changed their
method of calculating alloy surcharges, reducing the reference
period to 30 days from 2-3 months. Because of the
lag, when nickel prices began to fall in 2007, stainless steel
consumers were paying more for stainless steel while the
price of nickel was falling. It was felt that this would
reduce nickel and stainless steel price volatility.
