SMM Nickel Market Review And Forecast (Aug 7)

SHFE nickel experienced a volatile movement last week, declining by 0.29% WoW. On the macro level, the focus continued on policies following the political bureau meeting. Stimulus measures for consumption and policies supporting real estate and automotive industries were introduced, including the removal of purchase restrictions in certain second and third-tier cities and relaxing housing provident fund policies. These policies initially boosted SHFE nickel until last Wednesday night. On last Thursday, influenced by limited support from the pure nickel fundamentals, the price dropped to 167,580 yuan/mt. However, it rebounded to 169,970 yuan/mt on last Friday morning due to remarks from the National Development and Reform Commission emphasizing consumer promotion. Regarding fundamentals, a domestic refined nickel producer is planning equipment maintenance in August, but it is not expected to impact overall supply. Additionally, an overseas pure nickel project is set to begin production in mid-August, with a planned capacity of 50,000 mt/year. Initial production is estimated at 500-1000 mt/month, gradually increasing throughout the year. In terms of demand, military orders in the alloy sector remained steady, while civilian orders were somewhat restrained by rising raw material prices. Orders decreased in July, and alloy enterprises are generally cautious about civilian order expectations for August. In the electroplating industry, weak downstream demand and high raw material prices have led to continued reduction in pure nickel consumption throughout July. As July and August are the off-season for the electroplating industry, it's anticipated that nickel consumption will remain weak in August due to higher temperatures and sustained weak downstream demand. In summary, current nickel prices are primarily influenced by macro factors. With limited fundamental support, it's expected that nickel prices will continue to experience a volatile movement this week.