By Allen Sykora
(Kitco News) -- BNP Paribas looks for nickel to underperform other base metals. The bank forecast in July that tin would overtake nickel.

“This has already happened and we expect the price gap to widen in 2011-12,” BNP says. “Nickel also looks particularly poorly placed relative to copper.”

The nickel-copper price ratio has risen in 2010 to 3:1, but BNP expects it to decline toward 2.5:1 on average in 2011 and further in 2012. Nickel has been a strong performer this year, helped when fears of big economic slowdowns in China and the U.S. eased and cutbacks were forced onto the Chinese nickel pig iron industry, BNP says.

The bank increased its forecast for a nickel supply deficit to 75,000 metric tons this year, but expects a “broadly balanced” market in 2011.

Meanwhile, LME warehouse stocks have risen modestly since late July. BNP says “there will be ample potential nickel supply in the medium term.”

In particular, growth in production could accelerate sharply as Vale-Inco eventually ramps back up at its Sudbury and Voisey’s Bay mines, miners collectively reverse previous output cutbacks, and “sizeable” new projects come on line.

Thus, growth in world nickel production could rise by close to 20% over 2011-12, compared to 4% in 2010, BNP says.

Found here: http://www.commodityonline.com/futures-trading/market/BNP-Paribas-sees-nickel-underperforming-base-metals-17964.html

on, April 2011