SMM Morning Comment On Nickel Market (Aug 14)

SHANGHAI, Aug 14 (SMM) –

SHFE nickel experienced a volatile movement last week, declining by 2.76% WoW. On the macro front, the focus last week was on the U.S. July non-seasonally adjusted CPI annual rate. According to data released on last Thursday evening (August 10), the actual value stood at 3.20%, slightly lower than the market expectation of 3.30%. This indicates an easing of inflation in the current U.S. market, which in turn strengthens market expectations for a rate cut in September. This positive sentiment has extended to the commodities market, boosting non-ferrous metals prices on last Friday. In terms of fundamentals, the increased production and gradual ramp-up of overseas pure nickel and intermediate product projects in mid-August will likely lead to a more relaxed supply outlook for pure nickel in the coming period. Furthermore, pure nickel imports in the first half of this year dropped by 46.48% compared to last year's same period. According to SMM research, it has been found that some traders have entered long-term deals with foreign suppliers for pure nickel in 2023. This suggests potential for more pure nickel imports in the second half of 2023. The alloy industry wasn't very hopeful about civilian orders last week because consumers were feeling less positive overall. But because of production scheduling and procurement pace, alloy enterprises still anticipate some demand in August. The stainless steel industry continued its increased production trend from July, providing some support to the demand for pure nickel. In the electroplating industry, there's a general impact from the off-season, with downstream demand orders remaining sluggish, resulting in limited demand for pure nickel. Production of 300 series stainless steel may drop in August due to poor demand. To sum up, nickel prices are mainly subject to macro factors, with limited support from fundamentals, and may move in a wide range this week.