Nickel prices are unlikely to risesignificantly from current levels unless further steps are
taken to reduce production, Shearson Lehman Brothers said in
its quarterly nickel market report.
    The market had recovered slightly to around 1.72 dlrs a lb
yesterday from its four year low of 1.55 dlrs in early January,
due to the absence of Soviet nickel cathode deliveries, but
Shearson sees Soviet shipments soon returning to last year's
buoyant levels, which should ease current tightness.
    Output reductions by producers will take effect later this
year but are likely to be offset by increases elsewhere.
    Shearson said the nickel market will be virtually in
balance during 1987, with total non-Socialist world demand at
556,000 tonnes, compared with an estimated 544,000 tonnes in
1986, production at 505,000 tonnes (504,000) and imports from
Socialist countries at 47,000 tonnes (50,000).
    It forecast prices will edge higher during the year from a
first quarter average of 1.67 dlrs a lb up to 1.77 dlrs in the
last quarter. The year's average will be around 1.72 dlrs a lb
compared with 1.76 dlrs in 1986, using London Metal Exchange
cash metal prices in dollar terms and assuming an average 1987
sterling exchange rate of 1.55 dlrs.
 REUTER
