Nickel Prices Grow last Week on Supply Tightness and Improvement in Demand

SHANGHAI, Apr 17 (SMM) - The US non-farm data released last Friday exceeded expectations, and the market trades on economic recession seemed to be reversed. On the evening of April 7, the US Department of Labour announced that the seasonally adjusted non-farm payroll in March was 236,000, lower than the expected 239,000, but the unemployment rate in March was 3.5%, lower than the expected 3.6% and the previous reading of 3.6%. The data show that the US labour market is still strong. The market highly expects the US Fed to raise the rate by 25 basis points in May, which will exert pressure on the nonferrous metals prices in the short term. At the same time, the market also bets that the Fed will slow down or pause rate hikes in the future, which will have a positive effect on the nonferrous metals prices.

Near the delivery of the SHFE 2304 nickel, most traders included the NORNICKEL nickel in the sources for warrant delivery, hence the premiums stood firm. The suppliers of Jinchuan nickel were much more willing to ship, dragging down its spot quotes. The NPI plants generally held their prices firm. Recently, the transactions between traders and NPI plants have increased. Market players generally remained bullish. On the demand side, according to SMM research, the spot stainless steel transactions became sluggish last Thursday, and the premiums dropped slightly amid falling futures prices last Friday. SMM expects the spot stainless steel prices to be stable with some drops in the short term. The supply tightness and the improvement in demand beefed up nickel prices to a certain extent. However, the rate hikes have led to a slight economic recession, and the electrowinning nickel output is expected to increase, which may weigh on nickel prices.