[SMM Analysis] Nickel Prices Fluctuated and Strengthened This Week, Demand Expected to Gradually Recover

Summary of Nickel Market, February 24-28: Nickel Prices Fluctuated and Strengthened This Week, Demand Is Expected to Gradually Recover

This week, nickel prices showed a fluctuating trend but remained strong overall. Spot prices ranged between 123,800 and 128,300 yuan/mt, while SHFE nickel futures prices fluctuated between 123,500 yuan/mt and 127,510 yuan/mt.

In the last two days of the week, the strengthening of nickel futures prices may have been influenced by macro resonance both domestically and internationally, with three main factors: 1. The rise in LME nickel prices yesterday may have driven up SHFE nickel prices; 2. Indonesia's new foreign exchange policy extended the deposit period for margins, providing market support; 3. The upcoming Two Sessions in China have led to widespread market optimism, further boosting nickel prices.

From a fundamental perspective, although most factories have resumed operations, overall trading volume remains low, closely related to downstream demand not meeting expectations.

As of February 28, premiums and discounts for Jinchuan brand nickel ranged from 1,500 yuan/mt to 2,000 yuan/mt, with an average of 1,750 yuan/mt. Recently, influenced by domestic and international news, next week's market is expected to remain sentiment-driven, with premiums and discounts likely to maintain a fluctuating trend.

This week, nickel prices strengthened under the dual influence of optimistic macro expectations and cost support. However, the surplus in refined nickel has not yet been resolved, and downstream demand recovery still requires time. In the short term, nickel prices are expected to continue fluctuating, with attention on domestic Two Sessions policies and changes in Indonesian nickel ore supply. Spot nickel prices are expected to fluctuate within the range of 123,000-129,600 yuan/mt, while futures prices are expected to range between 123,000 and 128,000 yuan/mt.

Bonded Zone Inventory Decreased by 100 mt WoW

In terms of inventory, according to the latest SMM survey data, bonded zone nickel inventory this week stood at 5,500 mt, a decrease of 100 mt WoW.

Inventory

SMM's six-location inventory totaled 45,456 mt, down by 1,753 mt WoW. Although inventory decreased compared to last week, it remains at a high level, likely due to the impact of the Chinese New Year holiday in February and fewer calendar days. Attention should be paid to whether the Two Sessions will introduce favorable policies to boost demand.