Pure Nickel Premiums Rebounded amid Supply Tightness, and Stainless Steel Mills Ramp up Purchases of NPI

SHANGHAI, Sep 6 (SMM) - On the supply side, the premiums of Jinchuan nickel rebounded amid scarce supply. In terms of NPI, the steel mills were more active in purchasing, hence the demand for NPI picked up. NPI plants were increasingly firm to their prices in light of high cost. On the demand side, the traditional seasonal high in September is expected to inject some animation to the stainless steel market, and the terminal players have started to restock though in small amount. For alloy, nickel plate inventory dropped significantly last week maid improving order book, but the demand weakened again amid rising premiums. To sum up, pure nickel supply tightened to some extent recently, offering support to nickel prices in the near term.

Pure nickel: In the spot market, Jinchuan nickel was quoted with premiums of 11,000-11,500 yuan/mt as of September 5, with an average of 11,250 yuan/mt, up 2,250 yuan/mt from a day ago. NORNICKEL nickel was quoted at premiums of 4,500-4,800 yuan/mt, with an average of 4,650 yuan/mt, down 100 yuan/mt from a day ago. Spot premiums of Jinchuan nickel surged amid scarce sources available in the market. The spot transactions were relatively thin. In terms of nickel briquette, the prices were 171,900-172,700 yuan/mt, an increase of 9,150 yuan/mt from a day ago. Currently, producing nickel sulphate with dissolved nickel briquette has already demonstrated profitably, hence the demand for briquette is expected to pick up coupled with expected production resumption of steel mills. 

NPI: As of September 5, SMM Ni 8-12% high-grade NPI was 1257.5 yuan/mtu (ex-factory, tax included), flat from the previous trading day. On the demand side, the spot prices of stainless steel rose, and the short-term demand stabilised with optimism in the stainless steel market with regard to September. At the same time, with the gradual decline of in-plant NPI inventory held by stainless steel mills, the mills became more active in purchasing, with more inquiries for NPI. On the supply side, as the demand for NPI has improved, NPI plants started to make shipments, but held the prices firm in light of high cost. NPI prices are expected to rebound slightly in the near term. 

Stainless steel: As of September 5, the prices of spot stainless steel in Wuxi and Foshan both rose. The prices of 304 HRC and CRC, 201 and 430 stainless steel all increased. According to SMM research, the agencies of Tsingshan Group newly announced the prices for forward goods, which was 50 yuan/mt higher than the last time as the market still has certain expectations for the recovery of demand in September, and the terminal players have begun to restock though in a small amount. In terms of cost, the prices of high-grade NPI remained stable, and the market was slightly less stagnate with active inquiries and transactions. Hence the prices are expected to stabilise in the near term. Ferrochrome prices rose to some extent, but the manufacturers still suffered losses. Some ferrochrome manufacturers indicated stronger production cuts in September, intensifying the game between the supplier and buyer. Ferrochrome prices are stable for the moment.

The prices of 304 cold-rolled coils moved between 16000-16400 yuan/mt, and the prices of 304 hot-rolled coils were between 15500-16100 yuan/mt. 316L/2B was reported at 26,100-27,300 yuan/mt in morning trade, 201/ 2B at 9,300-9,600 yuan/mt, and 430/2B at 7,900-8,300 yuan/mt. As of 10:30 am (Beijing time), the SHFE SS 2210 contract stood at 15825 yuan/mt, and the spot premiums in Wuxi were 345-745 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt).