Nickel has been the clear winner across metals and bulks, up over 30% in the last 9 months. While the ban of Indonesian ore provided a paradigm shift, the improvement in ex-China industrial activity has also been important. As stainless steel production increases, so too does hoarding of inventory as those who hold wait for better prices.
The other interesting outperformer is zinc, which has eased off recent highs but remains strong. This is somewhat of a surprise given the balance is not particularly compelling vs. other metals, while end-use markets look like they are starting to waiver. This should weigh on zinc from here and lead should regain some of its lost price differential.
Palladium has been relatively strong, although it might be time to take profits. While the demand/supply balance remains compelling, news flow on South African strikes and instability in Ukraine are unlikely to be supportive in the very near term.
The base for thermal coal was low and prices are now close to where they were 9 months ago. So after a brief spurt, they are back in the doldrums.
Coking coal prices remain dreadful, although further downside is perhaps limited by the destocking of coke by Chinese steel mills.
Indeed, the immediate future for steel raw materials is not dreadful, with steel inventories drawing and apparent consumption ok. But with the construction outlook appearing wobbly, its best to stay away from iron ore,
