The Nickel Prices Remained High in April, with the Greatest Increase of 17% in Spot Prices. Can the Tight Supply Improve in May? [SMM Monthly Topic]

SHANGAHI, May 5 (SMM) - Looking back on the trend of nickel prices in April, most of the trading days were in upward trend and only few were in downstream trend. SHFE nickel remained high as a whole in April. How will the nickel prices go in May? SMM explains as follows:

Spot market 

The average price of SMM 1# refined nickel went upward as a whole in April. The average price on April 19 was up to 247,850 yuan/mt, up 17% from the lowest point on April 11. According to SMM, on April 29, in the spot market, Jinchuan nickel were quoted at 234,000- 236,500 yuan/mt, with an average price of 235,250 yuan/mt, down 500 yuan/mt from April 28. NORNICKEL nickel and nickel briquette were offered flat at 231,300- 233,500 yuan/mt, and the average price was 232,400 yuan/mt, down 100 yuan/mt from yesterday. The overall spot premiums declined on April 29 as the futures rose rapidly and traders were eager to ship amid the end of the month. As nickel briquette prices were higher than nickel sulphate, there were few transactions and inquiries. 

In terms of the inventory, the overall pure nickel inventory was in downward trend. The pure nickel inventory stood at 11,919 mt as of April 29. According to SMM, as of April 29, nickel ore inventories across all Chinese ports increased 213,000 wmt to 5.877 million wmt. In Ni content, the stocks rose 1,700 mt to 46,200 mt. Nickel ore stocks across seven major Chinese ports increased 53,000 wmt from last week to 2.605 million wmt. Nickel ore stocks at ports were gradually increased.

SMM Outlook 

According to SMM, the supply was still tight due to the overseas pure nickel supply shortage amid the import loss, and the low domestic operation rate of pure nickel. 

On the demand side, affected by the pandemic, the cargo throughput of Shanghai port fell, so that the overseas orders of downstream nickel hydrogen manufacturers were forced to be postponed or cancelled. Meanwhile, the overall demand was weak as the increasing cost of alloy raw materials was difficult to be transmitted to the downstream. To sum up, the continuous tight supply gave strong support to the nickel prices, while the weak demand put pressure on the nickel prices. By the end of April, the import remained at a loss, so the tight supply has not been improved. Looking forward to the future, if the SHFE-LME spread is restored, the nickel prices may fall after the imported nickel flows into the domestic market.

[Disclaimer: The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.]