Overall, the fundamentals indicate strong supply and weak demand, with continuous stock accumulation. This week, nickel prices may fluctuate weakly.
SMM News on March 26th: Influenced by continuous stock accumulation and accelerated approval of RKAB, Shanghai nickel futures have been consistently weak since late March, with only a few days of gains. As of midday today, they fell by 2.10%, marking the third consecutive day of decline. London nickel prices have followed a similar trend, with a smaller decline today, down 0.51% as of 11:57.
Since late March, the average price of SMM 1# electrolytic nickel has continued to decline, dropping by 1.76% compared to the previous day on the 26th. According to SMM research, the atmosphere of spot market transactions improved on March 25th, and downstream purchasing intentions began to rebound due to the impact of their own raw material inventory. In addition, some overseas refined nickel is expected to arrive this week, increasing the supply expectations.
On the supply and demand side: In terms of production, it is expected that the national refined nickel production in March will be 25,000 tons, a slight increase compared to the previous month. According to SMM research, during March, affected by the continuous rise in nickel prices, the enthusiasm of manufacturers to produce electrolytic nickel still exists, and with the progress of electrolytic nickel production expansion, the production of some electrolytic nickel plants still maintains an upward trend. However, the rapid rise in raw material prices in March has caused some difficulties in the supply of raw materials for some externally sourced electrolytic nickel plants, which may affect a small portion of electrolytic nickel production. SMM expects that refined nickel production in March may increase by 1.6% compared to the previous month.
As for nickel ore, currently, although the current RKAB approval quota has not fully met the market demand expected for this year, according to SMM, considering the factors of inventory needed for their own production and the upcoming Idul Fitri (Eid al-Fitr) in early April, the basic completion of short-term reserve stocks has been achieved. The previous tight supply factors have significantly weakened the impact on current smelter production.
