SHFE Nickel Prices Drop on the Bearish Macro Factors

SHANGHAI, Feb 20 (SMM) - Multiple macro data were released one after another last week. On February 14, the US Department of Labor announced that the seasonally adjusted CPI annual rate at the end of January was 6.4%, exceeding market expectations. On the evening of February 15, the US Department of Commerce announced that the monthly rate of retail sales in January was 3%, far exceeding the forecast value of 1.8%, and higher than the previous reading of -1.1%, which also indicated that the economic status and prospects of the US are relatively optimistic. On February 16, related department announced that the annual rate of PPI in January was 6%, which was higher than the forecast reading. Both PPI and CPI surpassed market expectations, which also shows that the current US inflation is still high. On the evening of February 16, the US Fed officials delivered hawkish remarks, and the probability of the Fed raising interest rates by 50 basis points at the February meeting rose sharply. On the supply side, SHFE nickel prices fell affected by the higher-than-expected US retail sales in January. The spot premiums of pure nickel were raised, but the absolute price of spots dropped by nearly 3,500 yuan/mt. The spot transactions and inquiries were acceptable. NPI sellers generally lowered their quotations, and panic filled the market. In terms of NPI, due to the weakening stainless steel futures and spot prices, some NPI factories and traders have reduced their quotations. On the demand side, the spot quotations of stainless steel were stable with occasional drops. Some traders cut their prices to ship amid high inventories in the market, thus the traded price continued to decline. In general, the demand for pure nickel grew as the prices dropped in the past few days.