Nickel Prices to Fall Further on Potential Growth of Electrowinning Nickel Output

SHANGHAI, Apr 10 (SMM) - A number of macro data released last week fell short of expectations, hence the SHFE nickel prices fluctuated wildly. On the evening of April 5, the US March ADP employment report showed that private payrolls added 145,000 in March, which was far lower than the previous reading of 242,000 and lower than the predicted figure of 200,000. On April 6, the US Department of Labour announced that the initial jobless claims were 228,000 in the week ended April 1, higher than the forecast of 200,000. The above data showed a weak US job market and also indicated that the US non-farm data released last Friday night might not be optimistic. Moreover, the US banking crisis reflected that the US financial system was in danger in the context of the rate hikes. The market thus worried about the future US economic recession, which had a negative effect on nonferrous metal prices. In 2023, electrowinning nickel companies begin to produce finished products with nickel sulphate, and the NPI market is in a supply surplus, which affects the factors contributing to nickel price change. The break-even point of nickel sulphate produced with nickel briquettes supports the nickel prices, while the profit margin of electrowinning nickel produced with nickel sulphate puts a certain pressure on the prices. Nickel sulphate demand from the new energy sector may not be optimistic until mid-2023, which may weigh on the prices. Profit margins of electrowinning nickel will bounce back on stable refined nickel prices or bullish macro and fundamental factors, which will boost the electrowinning nickel production. In the long run, the electrowinning nickel output is expected to grow, and the nickel prices will fall further.