SMM Daily Review - 2012/7/31 Nickel Market

Zhongwei shares issued an announcement last night that, in view of the company's continued optimism in the high nickel matte recovered from nickel laterite smelting, its wholly-owned subsidiary Zhongwei Hong Kong New Energy reached a supplementary agreement with RIGQUEZA to make additional investments in the joint venture PT.ZhongTsing New Energy. The two parties agreed to build a new laterite smelting project in Indonesia (Phase II) with an annual production capacity of 30,000 m of high nickel matte in metal content on top of Phase I project.

The current tightness of NPI, coupled with the upward trend in cost-end prices (mainly rising electricity prices) and the reduction in NPI output caused by power rationing, has made the problem of NPI shortage more difficult to solve.

Nickel futures prices rose significantly last week and then fell to around 140,000 yuan/mt on February 26, and the spot transactions rebounded. Currently, the downstream industries of refined nickel have fully resumed work, and the orders from alloy casting enterprises are relatively stable as they had restocked before CNY and maintained production in holiday.

Trading sentiment in China’s domestic nickel market was moderate, with SHFE nickel fluctuating.

Nickel Price Advances Following Production Cut News

With the opening of profitable import window for several days, premiums for Russian nickel in bonded area rose rapidly. 

On Tuesday, Jinchuan nickel was offered at premiums of RMB 800/mt over Wuxi’s 1710 nickel, and Russian nickel at premiums of RMB 250-300/mt over the same contract. 

Nickel price hovered at highs on Friday, and market caution ruled market trading sentiment, with small purchases by alloy and electroplating plants, Shanghai Metals Market learns. 

On Tuesday, downstream producers were not active in purchases despite price fallback from highs. Some traders chose to sell Russian nickel and buy Jinchuan nickel due to a smaller gap.

Premiums of imported Russian nickel traded higher slightly last week due to limited resources, Shanghai Metals Market learns.