Bloomberg’s Interview with Dealers in Wuxi

        The news that the physical delivery volume of China Stainless Steel Exchange for electrolytic nickel cathodes mounted about 1,400 tonnes in October attracted attention from the mass media. The other day the U.S. media giant---Bloomberg L.P. assigned the journalist to have a face-to-face interview with the leaders of the Exchange and the dealers with regard to the current metal marketing tendency and development of the Exchange.
        During this interview, dealers were active to make a speech on the questions the journalist was interested in, including why this monthly delivery volume is so high and whether or not the physical market and the investor sentiment was reviving. Meanwhile, the Bloomberg’s journalist represented the foreign media to express their perspective that stocking up nickel by Chinese was deemed as a financial leverage for further investment or speculation but the real demand was uncertain.
        Correspondingly, the experienced nickel dealers answered the questions. Mr. Ji Zhenhui, one of the nickel dealers from Shanghai said that, his company made a purchase in this October from the Exchange and would do the physical delivery due to the contract date. When asked whether the future market went long, he said that his company made profit on the Exchange through arbitrage. But he was also prudent about the future tendency in spite of the support from the depreciated U.S. dollar and economic stimulus packages.
On the other hand, the stainless dealers as well stated their own opinions. Mr. Yu Guansheng, a veteran in the stainless steel market, said that the liquidity of China’s capital market would be lower in the fourth quarter because banks used to tighten the credit at that time for fear of overmuch bad debt. In addition, the current price of stainless steel was still weak, which to some extent eroded the investor sentiment. So, he was not too optimistic. He predicted that the nickel market would experience a downward oscillation but not deep. He also emphasized that his company would continue engaging in hedging and arbitrage on the Exchange to make profit and avoid the price risks in case that the future demand went weak.
        After the interview, the dealers and the journalist had a visit on the approved warehouses in which bundles of nickels originating from China, Canada, and Russia were orderly stocked.

　

 
The Scene of Interview

Discussion Among Dealers