Nickel Trading Picks up as the Prices Decline

SHANGHAI, Feb 27 (SMM) - At the beginning of last week, real estate financing obtained favourable policies from the subsided negative macro factors and pilot filing of private real estate investment funds issued by the Asset Management Association of China on February 20. The market was optimistic about the macro front. The Chinese infrastructure and real estate markets have picked up, and the nonferrous metal market has been boosted. However, the shrinking demand caused sluggish nickel trading. On the evening of February 23, LME issued a notice saying that nickel trading In Asian hours will be resumed on March 20, which aroused an uproar in the market and led to a decrease in nickel prices. In terms of fundamentals, Chinese pure nickel output will probably grow further in February. The SHFE/LME nickel price ratio rose, driving the spot profits. Some traders who locked in the price ratio cleared customs. The overall trading was average last week due to the wild fluctuation in nickel prices. Downstream demand weakened affected by the purchasing cycle of alloy manufacturers. However, some companies still purchased raw materials last Thursday and Friday. The nickel briquette premiums continued to fall and the mainstream premiums were around 2,000-2,300 yuan/mt. However, according to SMM research, the demand for nickel briquettes from the new energy sector is still poor as the prices are higher than nickel sulphate prices. At present, the overall demand for nickel briquettes from stainless steel mills is small, hence the market witnessed almost no nickel briquette transactions. To sum up, the demand for pure nickel remained weak, but SHFE nickel prices were supported by the low inventory of deliverable goods. It is expected that nickel prices will continue to fluctuate this week.