SHFE Nickel Prices Keep Falling, and the Upstream Companies Maintain their Shipment Rhythm

SHANGHAI, Feb 21 (SMM) - SHFE nickel kept falling amid the expected sufficient nickel supply. Upstream enterprises were much more willing to ship, dragging down spot premiums yesterday. On February 20, the average price of SMM Ni 8-12% high-grade NPI was 1,350 yuan/mtu (ex-factory, tax included), flat from the previous trading day. Some stainless steel mills have set the NPI prices for March in the form of fixed orders. The sellers’ quotes remained almost unchanged, but the purchase prices offered by stainless steel mills fell slightly. On the demand side, according to SMM research, the news that stainless steel mills controlled the goods allocation last week boosted market confidence, and the #304 stainless steel trading was acceptable. However, processing plants purchased cautiously amid poor orders. Most alloy companies have basically completed restocking, hence these enterprises made fewer inquiries. To sum up, the pure nickel sector faces weak supply and demand. Nickel prices will move rangebound with occasional drops.

Pure Nickel: On February 20, premiums of Jinchuan nickel were 7,200-7,500 yuan/mt. The average premium stood at 7,350 yuan/mt, down 400 yuan/mt from at the trading day. Quotes of NORNICKEL nickel were 5,000-5,500 yuan/mt, and the average price stood at 5,150 yuan/mt, flat from the previous trading day. SHFE nickel kept falling amid the expected sufficient nickel supply. Upstream enterprises were much more willing to ship, dragging down spot premiums yesterday. The prices of nickel briquettes were 204,500-205,600 yuan/mt, down 4,000 yuan/mt from the previous trading day. Nickel briquette trading was poor as the prices were still higher than the nickel sulphate prices.

NPI: On February 20, the average price of SMM Ni 8-12% high-grade NPI was 1,350 yuan/mtu (ex-factory, tax included), flat from the previous trading day. Some large stainless steel mills have set the NPI prices for March in the form of fixed orders. The sellers’ quotes remained almost unchanged, but the purchase prices offered by stainless steel mills fell slightly. Spot stainless steel prices dropped. The overall nickel ore prices remained high. NPI plants which insisted on high NPI quotes amid the firm ore prices did not hold much goods in their hands. On the demand side, since the stainless steel mills were suffering losses, they could only accept lower purchase prices of NPI, which puts greater pressure on the NPI factories. SMM believes that the short-term NPI prices will probably fall.

Stainless steel: On February 20, the spot prices of stainless steel in Wuxi and Foshan markets stabilised. According to SMM research, the news that stainless steel mills controlled the goods allocation last week boosted market confidence, and the #304 stainless steel trading was acceptable. However, processing plants purchased cautiously amid poor orders. Inventory of #430 cold-rolled coils is growing because of the slack orders and the normal shipments of stainless steel mills, and the prices fell. SMM expects the spot stainless steel prices to be stable with some drops in the short term. The #304 cold-rolled coil in Wuxi was quoted at 17,000-17,300 yuan/mt, and the average price across China stood at 16,980 yuan/mt. Prices of #304 hot-rolled coils in Wuxi were 16,600-16,800 yuan/mt, and the average price across China was 16,705 yuan/mt. Quotes of #316L cold-rolled coils in Wuxi moved between 33,800-34,200 yuan/mt, and the average price across China was 33,925 yuan/mt. Quotes of #201J1 cold-rolled coils in Wuxi moved between 9,650-9,750 yuan/mt, and the average price across China was 9,740 yuan/mt. #430 cold-rolled coils in Wuxi were quoted at 8,300-8,500 yuan/mt, and the average price across China stood at 8,440 yuan/mt. As of 10:30 a.m. yesterday, the SHFE SS 2303 contract stood at 16,510 yuan/mt, and the spot stainless steel  premiums in Wuxi were 660-960 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt)