SHANGHAI, Feb 7 (SMM) - On the supply side, SHFE nickel prices trended lower in the early trading yesterday. The downstream restocking demand pushed up the spot transactions and the number of inquiries. NPI sellers insisted on high quotes since they expected the consumption to grow somewhat after February 5. On the demand side, according to SMM research, Tsingshan finally offered the bid price for March, which was higher than market expectations; however, sellers still quoted cautiously in the intraday trading. Downstream processing plants have also resumed their production one after another. Alloy manufacturers were more willing to inquire amid the crashing pure nickel prices, and they may buy raw materials on rigid demand. In general, the demand for pure nickel grew as the nickel prices dropped yesterday. SMM believes that the nickel prices will move rangebound today.
Pure nickel: On February 6, premiums of Jinchuan nickel were 6,500-7,500 yuan/mt, and the average premium stood at 7,000 yuan/mt, flat from the previous trading day. NORNICKEL nickel was quoted at premiums of 6,300-6,800 yuan/mt, with an average of 6,550 yuan/mt, down 200 yuan/mt from a day ago. SHFE nickel prices trended lower in early trading yesterday. The downstream restocking demand pushed up the spot transactions and the number of inquiries. The prices of nickel briquettes were 216,000-216,500 yuan/mt, down 10,250 yuan/mt from the previous trading day. Nickel briquette trading was sluggish as the prices were still higher than the nickel sulphate prices.
NPI: On February 6, the average price of SMM Ni 8-12% high-grade NPI was 1,370 yuan/mtu (ex-factory, tax included), flat from the previous trading day. NPI sellers insisted on high quotes since they expected the consumption to grow somewhat after February 5. On the demand side, although stainless steel factories have basically resumed their work, the problem of mismatch between supply and demand remained unresolved. And the factories gained meagre profits, so the steel mills were relatively cautious in purchasing. However, the nickel ore prices were stable, which determined the profit margins of NPI plants. It is expected that the game between NPI and stainless steel sectors will continue. The short-term NPI prices will stay stable.
Stainless steel: On February 6, the spot prices of stainless steel in the Wuxi and Foshan markets stabilised. According to SMM research, Tsingshan finally offered the bid price for March, which was higher than market expectations; however, sellers still quoted cautiously in the intraday trading. Downstream processing plants have also resumed their production one after another. In terms of cost, the NPI prices stood flat. Stainless steel factories had to accept the higher raw material prices, which suppressed the stainless steel prices to a certain extent. The pressure, on the other hand, dragged down the NPI sellers’ quotations. SMM believes that the short-term NPI prices will move rangebound steadily. The prices of ferrochrome were also flat from the previous trading day. The prices were strongly supported by the low port inventory of chrome ore even though the downstream demand did not boom as expected. It is expected that the prices of ferrochrome may remain stable in the short term. In general, the market was more cautious about the high futures prices, and it is expected that the spot prices will fluctuate with some declines in the near term. The #304 cold-rolled coil in Wuxi was quoted at 17,100-17,500 yuan/mt, and the average price across China stood at 17,120 yuan/mt. Prices of #304 hot-rolled coils in Wuxi were 16,800-17,000 yuan/mt, and the average price across China was 16,885 yuan/mt. Quotes of #316L cold-rolled coils moved between 34,000-35,200 yuan/mt, and the average price across China was 34,570 yuan/mt. Quotes of #201J1 cold-rolled coils in Wuxi moved between 9,750-9,850 yuan/mt, and the average price across China was 9,760 yuan/mt. #430 cold-rolled coils in Wuxi were quoted at 8,550-8,750 yuan/mt, and the average price across China stood at 8,605 yuan/mt. As of 10:30 a.m. yesterday, the SHFE SS 2303 contract stood at 16,870 yuan/mt, and the stainless steel spot premiums in Wuxi were 400-800 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt)
