Nickel prices continue to garner strength, with the commodity climbing to an eight-month peak on Monday as traders continue to bid up the raw materials that are components of steel.
Stainless steel prices have been surging for the past few weeks on upgraded demand expectations. As steel has rallied, its component products have followed suit, gaining, even more, strength after China’s heightened regulations on steel speculative trading sent investors for an alternative way to bet on rising steel demand.
When 2017 kicked off, it was widely expected that steel demand would fall later in the year as China concluded its massive stimulus projects; but, things have started to shape up quite differently than expected. China’s economy seems to be on solid footing, making it quite likely that building will continue beyond the stimulus related projects. Also, America’s economy remains on solid footing, while as of late Japan has also churned out some pretty positive economic numbers. Japanese manufacturers confidence rose to its highest level in a decade in August, according to Reuters.
Also, right now, there is a big push to make stainless steel ahead of the Chinese government’s crackdown on emissions, and that is driving demand for steel components such as nickel.
Nickel has now pushed above the $11,000-ton mark. It is finding support at $10,600 and meeting resistance at $11,575.
Another positive for nickel has been the pullback in the U.S. dollar, and the possibility for the currency to continue to pull back as the Federal Reserve has turned a bit more dovish.