Metal markets are in the middle of another price boom that may eclipse the one seen last spring, according to the Financial Times. Prices of copper, nickel, lead and tin have all risen strongly with copper pushing at $8000 a tonne  and nickel exceeding $50 000 a tonne for short periods.
This boom is more broadly base than last year’s, but supported by the same cocktail  of factors; strong Chinese and global demand, constrained supplies, low levels of metal stockpiles and heightened financial speculation.
Combined with the high price of scrap steel, the steep upward trend in the market is not good news for powder metal manufacturers and the rest of the PM parts supply train.
Metal prices had a less certain start to the year amid expectations of slowing global economic demand, increased raw material production and concerns about the knock-on effects of the US housing slowdown. But commodity markets are driven by sentiment as well as known facts, and market sentiment has undergone a change since mid-February, particularly towards copper and nickel on the assumption of increased demand from the still-growing Chinese market.
Recent Chinese customs data show that more than 300 000 tonnes of copper were imported in March with imports for the first quarter up by nearly 60 per cent. Prices on the London Metal Exchange have risen more than 48 per cent since early February, and with such strong upward momentum traders are looking closely at the record $8790 a tonne set last May in the expectation that it will be overtaken in the latest surge.
Last year the price rally was confined to copper, aluminium, zinc and nickel, but this time round lead and tin are also touching record highs.
Nickel prices are double what they were last May when they reached a then-record of $21 850 a tonne. But leaving those price levels far behind, nickel has exceeded $50 000 a tonne already this year, although the general price level is just below that.
Continuing strong demand for stainless steel, which consumes about two thirds of nickel supplies, combined with supply constraint caused by delays to mining projects in Australia and New Caledonia have tightened the market and forced prices up.