Downstream Stocking Ahead Of Chinese New Year To Ease Refined Nickel Oversupply In January

In January, nickel prices extended their December decline, dipping to 122,750 yuan/mt before rising to about 125,000 yuan/mt. The spread between nickel plate and nickel sulphate prices shrank, as nickel sulphate prices stabilized with scant trades and nickel prices fell on fundamental factors, narrowing the price difference. On January 9th, LME nickel stock rose by 3,558 mt, the largest one-day increase since July 2022. Main 2023 stockpiles grew in Rotterdam, Europe, and Busan, Singapore, and Kaohsiung in Asia, with the Asian sites adding 11,100 mt of refined nickel, signaling ongoing inventory pressure. SMM research indicates Spring Festival transport disruptions will halt some truck deliveries in late January. Refined nickel smelter output may dip due to the holiday. Demand side, January saw a spike in downstream buying, boosting spot market activity as players stock up for the Spring Festival, and falling nickel prices and costs will improve downstream profit margins. The refined nickel supply surplus is expected to slightly lessen in January.