Tensions have escalated between North Korea and the USA, higher now than they have been for a long time. Regardless of this, nickel is in an upwards trend which has led to a 5 month high, technical reaction inclusive.

Welcome compensation versus the expected chrome price correction in the 3rd quarter of 2017. The weak dollar supports commodity prices, but there are lots more attempts as explanations.

Risk aversion on the financial markets or hardly any returns. Commodities could once more be seen as an investment alternative. The electronic trading systems are acting again as a booster.

The Federal Ministry of Justice is looking into the fake news of today in regard to the media. The autonomy of citizens can only be reached via education, therefore the wrong ministry?

Certainly not the silly season: US America and North Korea are going through a war of words hardly ever witnessed before and it can only be hoped that it does not go further than this. At least China did not put in a veto at the last sanctions imposed by the UN and announced its implementation. Perhaps this even shows just how critical the situation really is. Even nickel prices on the London Metal Exchange (LME) have not kept in line with the summer holidays and quieter times, but have, since the 10th July, started what can be described as an almost linear upwards rally, which has led, up to now, to a 5 month high of just below USD 11,000.00/mt. The low of this year of around USD 8,700.00/mt was at the beginning of June and is only just a few weeks ago. We are looking at a total increase of USD 2,300.00/mt or 26.5%.

The stainless steel sector would certainly to thank for this rise just at the right moment given that the price for charge chrome fell by 44 USD cents/lb, or 28.6% in the 3rd quarter compared to the previous quarter. In a time of a consolidation in the chrome market, the nickel price movement was a welcome compensation within the stainless steel commodity price portfolio. Yet questions still have to be asked about reasons for the price changes. Had the quite substantial chrome price correction been universally expected after the mighty 55 USD cents/lb increase of the 1st quarter 2017 over the 4th quarter 2016, which had obviously not been sustained, and had the estimation for nickel been too cautious after developments in the principal producing countries of Indonesia and the Philippines.

What definitely became an influence on events was the weakening of the US dollar against the Euro, and against many other currencies world-wide. Yet if the opinions of many analysts were to be believed, then the Euro was already long dead. The parity of USD 1.00/EUR and worse appeared to be an inevitable fact. A weaker dollar does, however, make commodity prices, which are mainly quoted in US-Dollars, more favourable when expressed in other currencies, which should support the theory of a stronger demand and therefore rising prices. In other words, with special summer sale prices, there should be more demand.

Consumer demand for stainless steel, one of the main uses for primary nickel, is, according to sources, very strong, but this was already the case when nickel was being quoted at prices around USD 9,000.00/mt and below. Since the beginning of June 2017, the stainless steel and nickel world have just not changed diametrically. This cannot be the fault of nickel warehouse stocks, since these have actually continued to grow since the beginning of the year. It must, however, be said that the availability of scrap, because of relatively low prices, has diminished, which of course does have quite a considerable effect on nickel units market supply when looking at the whole picture.

What has changed, however, with the conflicts of North Korea in the background and because of quite strange events on the German automobile market, are the stock markets. An example is that of the German Share Index Market, the DAX, which has shown clear downward tendencies since June. After the high of just short of 13,000 Index points, this is trading now again, even if only just, below 12,000 points. This is evidence of an even bigger risk aversion of investors, yet actually, commodities are not really the type of investment to be made if an absolute sure investment is required.

But the alternatives are becoming hard to find if a good return is being sought. Money investments have a negative interest rate, the change in trend of interest rates in the USA has finished, and in Europe there is uncertainty about this too. Bonds are therefore also passé. Shares are already much overvalued, so this almost just leaves commodities as the stopgap. A question here has also been asked by Eric Onstad, Specialist Commodities Correspondent with Reuters, about the trigger for the movement and whether it can be sustained. He sees the matter in the following way: Seasonal, summer, USD weakness, investor purchases, short coverings, rally in the steel sector, all of these things take prices higher, but with the danger of a reversal.

Even the recently announced Chinese production cuts could bring about higher steel prices. But what if it just stays with announcements and actual production figures do not change. Then prices would fall again. On the other hand, many rallies would be based on false alarms. Market strengths tend to actually run counter to real facts. And finally, the electronic trading systems, in line with trends of today, are catering to an increase in movement. In other words: nobody knows.

The high of just under USD 11,000.00/mt was technically already in a very strong overbought area, so that the correction which followed down to USD 10,600.00/mt was not surprising, but this cannot be confused with a change in trend. Fundamentally, the main reasons have been cited as the Korean conflict and the weaker growth figures of industrial production in China. The June figures had unexpectedly shown an increase in production, but now for July there was a setback again.

The new edition of the German Dictionary “Duden” has been increased by about 5,000 words. Many words of English origin which have been taken into the German language are part of these. Fake News, Selfie and Tablet are examples of some of them. With regard to Fake News, the fuss made of this expression and its origin is surprising. Similar expressions have been around for centuries, which have always described newspaper hoaxes and false stories, in the German language known as “Tartar Reports” or “canards”, taken from the French for duck.

Today’s news spreads via the internet at an amazing rate, but this does not just apply to fake news, but also to correct information. On the whole, the method of reporting is not just quicker, but presumably has become much more transparent, which of course must not please everyone. Some scandals in business and politics which are being uncovered now, would most probably, it can be imagined, hardly have come to light in the 1950s and 1960s. This also includes propaganda, contrived for whatever reasons, which can build upon by the misuse of reports.

The question, therefore, has to be really asked, whether it is really the task of the Federal Ministry of Justice and all its departments to occupy itself with the topic of Fake News so intensively and so much in the spotlight of the media. Vigilance should, and must, however, always be maintained, as latent attempts at using messages and news content to exert influence can be used as manipulation by any initiator. This means that the recipients, and these usually are the citizens and voters in countries, must be responsible enough to be able to judge and filter out just how much truth is contained in news reports. This would seem to be more a question of education and upbringing in schools, in higher education, and even in the parental home even if this is becoming a more antiquated picture.

If, however, a Ministry of Justice today imposes restraints on popular social media platforms, such as Facebook, then this is quite justified in terms of hate comments, radicalisation of any form, bullying etc., but it does not always reach its goal. It has been seen that incorrect material has been deleted. A response to this came quickly and Facebook was urgently requested to improve the quality of its complaints management and to increase the efficiency of its news filters and deletion software.

But now the situation has become even more ludicrous. The result, in effect, is that a giant international organisation, in private hands, has been given state legitimisation to become a censor of content. Perhaps a more adequate solution should be different to this.

The main purpose of a social media platform is the exchange of content between users. Originally this was aimed at the spreading and exchange of private content, photos and such within a defined group. This was until companies and information providers such as newspapers and television programmers became interested in using this media as information and marketing channels. Social media was then used more as an actual source and distribution centre for information and news of all types. The fact that “serious” and “not so serious” news providers are together on one platform does not make it any easier for the user to be able to differentiate between items.

Perhaps a self-imposed restraint could help towards transparency and truthfulness, or even a total withdrawal by the serious media who could then switch to another more dedicated news platform. If it can be made clear to users that social media cannot give guarantees about the journalistic content of items and whether these have been properly researched, then perhaps most of the users will treat it with more responsibility. At the same time, it is absolutely essential that content of criminal nature, no matter on which type of platform, should be reported to the necessary authorities by users and platform providers, so action can be taken.

The International Stainless Steel Forum (ISSF) has reported that global stainless steel production in the first quarter of 2017 has risen by 14.5 % over the previous year. 11.8 million tons stainless steel were produced. China increased by 19.4%, although production here had actually decreased compared to the strong previous quarter by 9.2%. Europe also presents a similar positive picture. Compared to the previous year, the increase is 6.1%, but also, compared to the previous quarter a plus of 8.4%, so that a quarterly stainless steel production of around 2 million tons was reached.

LME (London Metal Exchange)

LME Official Close (3 month)
August 14, 2017
Nickel (Ni) Copper (Cu) Aluminium (Al)
Official Close
3 Mon.Ask
LME stocks in mt
July 12, 2017 August 14, 2017 Delta in mt Delta in %
Nickel (Ni) 376.476 375.288 – 1.188 – 0,32%
Copper (Cu) 318.550 283.325 – 35.225 – 11,06%
Aluminium (Al) 1.392.625 1.291.250 – 101.375 – 7,28%

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