SMM Nickel Market Morning Comment Fully (Mar 21)

Overnight, the most-traded SHFE nickel contract opened at 137,000 yuan/mt, and closed at 136,560 yuan/mt, down 900 yuan/mt. Trading volume fell by 73,375 lots, and open interest decreased by 7,544 lots. On the macro front, the number of Americans filing for unemployment benefits stood at 209,000 in the week ending Mar 9, lower than the market forecast and previous value, indicating that the US job market recovered. Fundamentally, Indonesia said that it had completed the approval of 107 companies, and the progress of nickel ore approval accelerated. The market's expectations for tight supply of raw materials began to weaken, so the prices fell sharply in the afternoon. In addition, according to SMM research, the tight output of intermediate products is expected to ease in April. Nickel price is expected to go down.

Nickel: On March 20th, Jinchuan quoted a premium of 1,500-1,700 yuan /mt for nickel, with an average price of 1,600 yuan /mt, up 400 yuan /mt compared to the previous trading day. Russian nickel was quoted at a discount of -400 to -200 yuan /mt, with an average price of -300 yuan /mt, unchanged from the previous trading day.Shanghai nickel continued its downward trend this morning, fluctuating downwards. The atmosphere of transactions in the spot market improved slightly today, and downstream purchasing intentions slightly recovered under the influence of the decline in nickel prices. In addition, according to research by SMM, some overseas refined nickel is expected to arrive this week, showing an increasing trend in supply during the week. Today, the price of nickel beans is 132,800-133,600 yuan /mt, a decrease of 2,650 yuan /mt from the previous trading day's spot price. Today, the price difference between nickel beans and nickel sulfate is approximately 5,436 yuan /mt (the price of nickel sulfate is 5,436 yuan /mt higher than that of nickel beans). With the continued strong performance of nickel sulfate in the future, the price difference between the two may continue to widen.

Nickel sulfate: On March 20th, the SMM battery-grade nickel sulfate index price was 30,354 yuan /mt, up 250 yuan /mt from the previous working day, and the price of battery-grade nickel sulfate was 30,200-30,800 yuan /mt, with an average price increase of 250 yuan /mt from the previous working day. Inquiry activity remains high this week, and downstream gradually begins to prepare for April materials. In the tight supply and demand stage, the cost side continues to drive the upward trend in the price of nickel sulfate.

NPI: On March 20th, the average price of SMM 8-12% NPI was 948.1 yuan/nickel point (ex-factory tax-inclusive), down 1 yuan/nickel point from the previous working day. From the supply side, although the current number of nickel mine quota approvals continues to rise, it still takes time from the mine to the smelter, so the current operating rate of NPI production is still low. Although the price of chromium iron has risen, the trading mentality of NPI traders has tended to weaken, and some traders have actively lowered their prices recently, with increased shipment mentality. From the demand side, influenced by the rise in raw material prices, the stainless steel market shows a rebound trend. However, from the perspective of the spot market, the price increase in the market has not yet led to an increase in spot prices, mainly because terminal demand continues to remain weak. Overall, the supply and demand of the NPI industry chain is still weak at present, and it is expected that the price of NPI will remain weak in the short term.

Stainless steel: On March 20th, according to SMM research, today's spot prices of stainless steel remained stable, and the impact of the market downturn on the spot market was relatively small. The opening price of Ningbo Jin 316L cold and hot rolling on March 20th was 24,000 yuan /mt for 316L cold rolling, a decrease of 400 yuan from the price on the 18th. The intraday transactions remained weak, and after the low-priced goods disappeared, the purchase for bottom fishing also decreased synchronously. The oversupply situation of stainless steel is still difficult to improve in the short term, but the speed of further decline in cost and profit loss has slowed down. It is expected that the spot price of stainless steel will remain weak in the short term.On the same day, 304 cold-rolled Wuxi area reported 13,600-13,900 yuan/mt, 304 hot-rolled Wuxi area reported 13,200-13,300 yuan/mt, 316L cold-rolled Wuxi area reported 24,300-24,900 yuan/mt, 201J1 cold-rolled Wuxi area reported 8,750-8,850 yuan/mt, and 430 cold-rolled Wuxi area reported 8,100-8,200 yuan/mt. At 10:30 SHFE, the price of SS2405 contract was 13,865 yuan/mt, and the spot water in Wuxi stainless steel was 55-255 yuan/mt(spot trimmed= raw edge + 170 yuan/mt).