the Swiss financial conglomerate Credit Suisse said that the sharp reduction of stocks of Nickel which is in warehouses of the London metal exchange (LME), which today is seen as a sign of a lack of metal in the world may be an illusion, especially created by individual players in the market in order to raise prices.
According to the Bank, most of the metal withdrawn from LME could get into a private vault that helped to create the impression of a limited market and could lead to higher prices.
has attracted the attention of analysts Credit Suisse, so it is a deal signed in mid-October, when 78 000 tonnes of Nickel in the amount of about 1.3 billion US dollar was purchased by one buyer, with the result that official LME stocks fell to a 10-year low.
the Conspirators
"there is every indication that the game has entered the big business news service and Reuters pointed to a Chinese stainless steel producer Tsingshan as a buyer", - said Credit Suisse. "Tsingshan also been seen in the game to increase in July, which initiated the growth of Nickel prices before the ban on exports of Nickel from Indonesia emerged as a price factor".
According to Credit Suisse there are two versions of events:
- Tsingshan may find that you need extra Nickel to support the production of stainless steel in China after a ban on exports to Indonesia;
- Tsingshan might want to tighten the Nickel market, to raise prices and exert financial pressure on producers of stainless steel, which depend on the supply of Nickel by a third party.
it is Reported that some Chinese stainless steel producers are losing money because of high prices for iron ore and Nickel.
Tsingshan is not one of those who cause losses, but almost certainly knows who his competition is under financial pressure.
revenge of the rival
"These loss-making company will probably include some of those who lobbied the government to block the import of stainless steel from Indonesia Tsingshan," say Credit Suisse.
"In the interests of Tsingshan make production more expensive for others, out of the game some Chinese companies and potentially to crack open protected markets for their inexpensive stainless steel sheets from Indonesia even in the face of the tariffs."
According to Credit Suisse, both to ensure its own future supplies of Nickel and forcing competitors to build up loss, quite likely: "They are not mutually exclusive".
