As shown in my earlier posts, Nickel Asia (NIKL) is one of the top performing stock in the market for the year 2014 with 152% return as of September 2014. In fact this is where Security Bank places a huge percentage of their equity investment that comprises their UITF. The Security Bank UITF is also the top performer of the year, thanks to NIKL.
According to Bloomberg, this trend will continue next year. Thanks to the pullback in the stock market this December, we can now buy more shares!
Here is the excerpt from Bloomberg:
Nickel, the best-performing base metal this year, may extend its rally into 2015 as China’s output of nickel pig iron will drop amid dwindling stockpiles of higher-quality raw material, according to CLSA Ltd.
China’s production of NPI, a lower-grade alternative to the refined metal, may fall to 300,000 metric tons in 2015 from 410,000 tons in 2014 and 485,000 tons in 2013, said Ian Roper, Singapore-based commodity strategist at CLSA. The country’s inventory of Indonesian laterite ore is now down about 61 percent from a peak in January, he estimates.
The refined metal, used in making stainless steel, surged to $21,625 a ton in May on the LondonMetal Exchange after Indonesia started an ore-export ban in January and then slipped into a bear market in September as the Philippines filled the supply gap. Prices are still up 18 percent this year, the most among the main six base metals on the LME. China is the largest producer and user of nickel.
“Nickel should be back up above $17,600 by the middle of next year because the Indonesian ore in China will all have been consumed by the second quarter,” Roper said in a Dec. 9 interview. “It’s justified for it to go back to $17,600 to incentivize nickel pig iron running purely with Filipino ore, because that involves a 30 percent higher processing cost.”
The Philippines replaced Indonesia as the biggest nickel-ore supplier to China. Imports of the raw material by China dropped 25 percent to 42.4 million tons in the first 10 months of the year from a year ago, with Philippine ore accounting for 74 percent of the total, customs data show.
Indonesian Ore
Chinese stockpiles of Indonesian laterite ore are around 7 million tons after peaking at 18 million tons in January, Roper said. Inventory is being consumed at a rate of about 1 million tons a month, he said. Indonesia’s Constitutional Court last week upheld the export ban on raw material ores.
Indonesia, the top nickel-ore miner, usually provides higher grades of ore with a nickel contentaveraging about 1.6 percent, compared with Philippine material, according to the International Nickel Study Group.
China’s NPI inventory fell to 200,000 tons from around 650,000 tons in April, Goldman Sachs Group Inc. said Nov. 19. About 20 percent of Chinese NPI producers lose money at $15,000 a ton for refined metal, the bank estimates.
Higher NPI prices are necessary to entice Chinese producers forced to use lower grade ore from the Philippines, CLSA’s Roper said. The spot price for Chinese NPI climbed 15 percent to 1,090 yuan($177) per nickel unit as of Dec. 9 from this year’s low of $950 on Oct. 28, Metal Bulletin data show. Taiyuan Iron & Steel Group Co., China’s largest stainless steel producer, said it would pay 26 percent more for the product in December.
Refined nickel in London climbed 11 percent from a seven-month low of $14,690 on Oct. 28 as NPI supply began to tighten in China. Factory closures from late October to early November to limit pollution before the Asia-Pacific Economic Cooperation in Beijing may cut as much as 4,000 tons of NPI production, Beijing Antaike Information Development Co. said in October.
The metal for delivery in three months on the LME rose 0.4 percent to $16,350 a ton at 1:17 p.m. inHong Kong.
SOURCE: http://www.bloomberg.com/news/2014-12-12/nickel-seen-extending-rally-into-2015-by-clsa-on-ore-stocks-fall.html
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