Analysis: Nickel to stay firm before mid-March

SHANGHAI, Jan 17 (SMM) – The LME nickel price is forecast to remain above $12,000/mt before mid-March and the SHFE nickel is set to remain over 93,000 yuan/mt, SMM believes.

This is because we see little growth in the supply of primary nickel, which includes refined nickel, nickel pig iron (NPI) and other nickel smelting products, despite an increase in Indonesian nickel ore exports.

While we see a 600 mt shortage of refined nickel in China in January, the growth of NPI output is unlikely till March due to maintenance works at some plants. In addition, Jinchuan’s refined nickel output is unlikely to resume till April following the fire incident on New Year’s Eve.

In the stainless steel market, series 300 output is expected to pick up after Chinese New Year in mid-February. With low inventory levels – inventory/output ratio at 12% currently compared to 15% in the last four years – stainless steel prices are expected to rally when consumption improves after the week-long holiday.

In addition, a weaker US dollar and the expected recovery of manufacturing activities in the US, Europe and developing countries would add bullish sentiment to the bulk commodities market. 

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