SMM Nickel Market Morning Comment Fully (Mar 26)

Overnight, the most-traded SHFE nickel contract opened at 135,110 yuan/mt, and closed at 133,330 yuan/mt, down 1,380 yuan/mt. Trading volume fell by 43,048 lots, and open interest decreased by 5,215 lots. From a macro perspective, the US Fed has kept the upper limit of its interest rate at 5.5%. The Fed once again maintained interest rates unchanged. Powell's speech has not disclosed when to cut interest rate. This interest rate decision will have little impact on the market. Fundamentally, the progress of nickel ore approval accelerated and production of intermediate product projects in Indonesia ramped up. The market's expectations for tight supply of raw materials began to weaken. Nickel price is expected to go down.

Nickel: On March 25, Jinchuan quoted a premium of 1,900-2,200 yuan/mt, with an average of 2,050 yuan/mt, an increase of 125 yuan/mt compared to the previous trading day. Russian nickel premiums were quoted at -600 to -200 yuan/mt, with an average of -400 yuan/mt, a decrease of 100 yuan/mt from the previous trading day. SHFE nickel fluctuated downward this morning compared to yesterday. The atmosphere of spot market transactions improved slightly today, with downstream purchasing intentions beginning to recover due to the impact of their own raw material inventories. In addition, according to SMM research, some overseas refined nickel arrivals are expected this week, indicating an increase in supply. The price of nickel beans today is 130,600-131,550 yuan/mt, a decrease of 275 yuan/mt from the previous trading day, with a price difference between nickel beans and nickel sulfate of about 8,698 yuan/mt (nickel sulfate price is 8,698 yuan/mt higher than nickel beans price).

NPI: On March 25, the average price of SMM 8-12% NPI was 942.5 yuan/mtu (factory including tax), a decrease of 2.5 yuan/mtu from the previous working day. From the supply side, although the approval speed of nickel ore quotas has recently accelerated significantly, it still takes time from the mine to the smelter, so it is expected that NPI production in March will still be at a low level. However, due to the sustained low demand in the domestic terminal, some traders and iron factories have lowered their quotations. From the demand side, the stainless steel terminal demand has continued to be weak this week, thus not providing support to the NPI. Overall, the current stainless steel terminal demand remains weak, leading to an accumulation of supply, and the current NPI prices are expected to be weak.

Nickel Sulfate: On March 25, the SMM battery-grade nickel sulfate index price was 30,711 yuan/mt, unchanged from the previous working day, with the price of battery-grade nickel sulfate ranging from 30,500 to 31,000 yuan/mt, with an average price unchanged from the previous working day. Inquiry activity remained relatively high this week, with downstream actively procuring raw materials for early April. However, due to the upward pressure on raw material prices, the profit of nickel sulfate products has been restored, and the cost side may weaken the upward driving force of nickel sulfate prices in the future. Downstream sentiment towards high-priced nickel sulfate is increasingly cautious, with the current transaction centering on average prices.

Stainless Steel: According to SMM research on March 25, the spot prices of stainless steel continued to decline this week. Qingdao opened, and both April cold and hot rolled futures contracts dropped by 200 yuan/mt compared to last time. Delong's weekly plate synchronously lowered by 200 yuan/mt. Currently, 304 hot rolled has fallen below 13,000, with some traders even rushing to sell cold rolled resources at a base price of 130, despite some bottom fishing and procurement needs, with slightly improved transactions in the afternoon. However, the market remains pessimistic about future stainless steel consumption, and with oversupply, it is urgent for steel mills to reduce production to improve the supply-demand situation. On the same day, 304 cold rolled in Wuxi was reported at 13,400-13,700 yuan/mt, 304 hot rolled in Wuxi was reported at 12,900-13,000 yuan/mt, 316L cold rolled in Wuxi was reported at 24,200-24,500 yuan/mt, 201J1 cold rolled in Wuxi was reported at 8,700-8,800 yuan/mt, and 430 cold rolled in Wuxi was reported at 8,100-8,200 yuan/mt. SHFE 10:30 SS2405 contract price was 13,435 yuan/mt, with a premium of 145-445 yuan/mt for Wuxi stainless steel spot (cut-off = raw edge + 170 yuan/mt).