2007 price forecasts are lower
WEB EXCLUSIVE
Staff -- Purchasing, 9/1/2005
Nickel prices are going to slide though 2007, suggest Jim Lennon at Macquarie Bank, Alan Heap at Citigroup and Fraser Phillips at RBC Capital Markets—because of expanded supply ahead. Nickel prices are projected to average $7/lb this year. Lennon sees tags sliding to $6.50/lb in 2006 and $5.75 in 2007. A more-bearish Heap sees nickel averaging $5 next year and $4 in 2007. While Phillips forecasts $7 in 2006, he sees $6 in 2007.
Nickel futures traded on the London Metal Exchange (LME) have risen by 60% over the past two years as output from mines has lagged world consumption driven by Chinese demand for stainless steel. Demand for nickel is expected to exceed supply by 16,000 metric tons, Standard Bank of London has calculated. Toronto-based Inco has a major mine and smelter project already underway in Canada and is plotting another development project in New Caledonia. Melbourne-based BHP Billiton also is planning a billion-dollar project, in southwestern Australia.
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