[SMM Analysis] Nickel Prices Break Through the Psychological Barrier of 130,000 Yuan, Remaining Firm in the Short Term

Summary of Nickel Market from March 3 to March 7: Nickel Prices Strengthened, Surpassing the 130,000 Yuan Mark

This week, nickel prices showed a fluctuating trend but remained strong overall. Spot prices ranged between 127,400 and 129,700 yuan/mt, while SHFE nickel futures prices fluctuated between 124,600 yuan/mt and 131,400 yuan/mt.

This week, nickel futures prices exhibited an upward trend, successfully breaking through the psychological threshold of 130,000 yuan on Friday (March 7). The price increase may have been influenced by two factors: first, the recent pullback in the US dollar index provided some support for base metals, driving LME nickel prices higher and subsequently boosting SHFE nickel prices; second, the ongoing rainy season in Indonesia and the Philippines supported ore prices. Although there is potential for further short-term increases, the overall upside appears limited.

From a fundamental perspective, end-user factories have fully resumed operations, but demand remains weak. However, buoyed by information from the Two Sessions, demand is expected to improve in the short term.

As of February 28, premiums and discounts for Jinchuan-branded nickel ranged from 1,350 yuan/mt to 1,700 yuan/mt, with an average of 1,550 yuan/mt. Recently, nickel prices have been influenced by both domestic and international factors, and prices are expected to remain firm next week, with some potential for further increases.

This week, nickel prices continued to strengthen under the dual influence of macro factors and cost pressure. However, the surplus in refined nickel has not improved, and signs of recovery in downstream demand remain unclear. In the short term, nickel prices will face a tug-of-war between bearish fundamentals and bullish macro factors. Prices are expected to remain firm next week, with the possibility of further increases. Spot nickel prices are forecast to fluctuate between 127,600 and 134,500 yuan/mt, while futures prices are expected to range between 127,500 and 133,000 yuan/mt. 

Bonded Zone Inventory Remained Flat WoW

Inventory-wise, according to the latest survey data from SMM, bonded zone nickel inventory stood at 5,500 mt this week, unchanged from last week.