Pioneer Municipal High Income Opportunities Fund Inc V.MIO.H

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China, Japan Scramble for Nickel after Indonesian Ban May 09, 2014 03:05 GMT Source: Reuters Tags: NICKEL CHINA/JAPAN HONG KONG/TOKYO, May 8 (Reuters) - Nickel buyers in China and Japan are scrambling to secure supplies as soaring prices and a fear of shortages boosts demand for both refined metal and long-term ore contracts. The price of nickel ore from the Philippines has more than doubled since late February, as supplies have dried up from rival producer Indonesia, previously the world's biggest exporter. China, the world's largest nickel consumer, has recently increased imports of refined metal to help meet higher seasonal demand, say trader and importers, as the price of commonly used alternative nickel pig iron has soared since the Indonesian ban took effect in mid-January. Nickel demand may get a further boost from stockpiling by China, with refined imports due to start arriving at State Reserves Bureau warehouses before the end of June, sources with knowledge of the matter said. [ID:nL3N0JW1YT] "Everybody in China is bullish nickel and everybody is hoarding nickel of any kind," commodities strategist Ivan Szpakowski of Citi in Shanghai said. China, the world's largest steelmaker, has turned to laterite nickel ores in recent years to produce nickel pig iron, a cheap, low-grade ferro-nickel - an alloy of iron and nickel - used in stainless steel. Japanese stainless steelmakers rely mainly on ferro-nickel producers and scrap for content, while other steelmakers use refined nickel for speciality products. Nickel users and traders in both countries built up substantial stockpiles of ore ahead of the Indonesian ban that should last major users until the end of the year, say traders and industry watchers, but long-term supply is an issue. PRICES FLY Spot Philippine ores with 1.9 percent metal content rose more than 120 percent between late February and end-April, trading at $114 per wet tonne CIF China last week, traders said. "Spot ore prices have soared this year as we compete with Chinese makers to secure the Philippine ores," said a senior official at Japanese ferro-nickel and stainless steel maker Nippon Yakin Kogyo Co Ltd. <5480.t>. The price of nickel pig iron with 10-15 percent metal content has risen about 20 percent since early March to about 1,350 yuan per 1 percent of metal. This makes it more expensive than spot refined nickel prices in China, which have risen nearly 40 percent this year to about 131,750 yuan per tonne. "We are expecting 1,400 yuan soon," said a manager at a nickel pig iron producer. Traders said some producers were suspending monthly deliveries to stainless steel mills, who were resisting price hikes. Some Chinese mills were switching to refined nickel and were likely to lift purchases, said Wang Lixin, an analyst at Umetal.com in China, which monitors ore imports, although this would be gradual as mills needed to make small adjustments to production facilities. An executive at a large trading and investment firm in Shanghai, who declined to be named, said the group had bought 2,000 tonnes of benchmark three-month LME nickel back in April at $16,000-$17,000 per tonne. Demand for spot refined nickel had also been increasing due to stronger seasonal consumption, the executive said, although a probe into the use of iron ore for financing may curb imports by small trading firms. [ID:nL3N0NK1EU] In Japan, ferro-nickel producers who supply the steel industry are seeking longer-term supply ore contacts from Philippine miners, concerned about the possibility of a supply shortage next year, the Nippon Yakin Kogyo official said. An executive at another ferro-nickel maker in Japan said it was negotiating with Philippine miners to try to revise existing 3- and 6-month contracts into longer 5-year contracts. Japan's top makers such as Pacific Metals Co Ltd. <5541.t> and Sumitomo Metal Mining Co Ltd (SMM) <5713.t> have also boosted procurement of nickel ore from New Caledonia. (Additional reporting by Melanie Burton in Sydney; Editing by Richard Pullin) (([e-mail])([phone])(Reuters Messaging: [e-mail])) Read more at https://www.stockhouse.com/companies/bullboard/v.not/noront-resources-ltd#w3WcLKxureGFAhW5.99