SHANGHAI, Apr. 23 (SMM) - In Shanghai, Jinchuan Nickel prices were initially between RMB 106,300-106,500/mt, while Russian nickel prices were around RMB 105,500/mt. As LME nickel prices rose at a time, traders were unwilling to discount goods, and pushed up Jinchuan nickel prices to RMB 106,500-106,600/mt. Transactions improved from last Friday, with downstream buyers purchasing modestly.
According to a recent SMM survey, 60% of market players believe LME nickel prices will fall below USD 15,000/mt. The WBMS announced last Wednesday, global nickel market is in surplus of 2,800 mt during January-February 2013 (global nickel surplus had reached 130,400 mt in 2012); the INSG released its monthly report showing global nickel surplus was 21,500 mt during January-February 2013; Macquarie Bank raised its forecast for global nickel surplus this year by 52% last week, to 82,000 mt (the estimated surplus was 54,000 mt a month earlier), and stated that was a result of weak demand outside China, and growing output as new capacities came online. Meanwhile, LME nickel inventories have been surging, up by 10,000 mt. By Monday, LME nickel inventories reached a new high of 173,976 mt, which weighed on nickel prices.
40% market players believe LME nickel prices should stop falling and fluctuate between RMB 15,000-15,400/mt for some time. According to SMM sources, prices around USD 15,000/mt are close to nickel cost lines, which is a strong support level for nickel prices, so some market players think nickel prices will hover around this level if there absent any significant negative news. But with existing negative news and climbing LME nickel inventories, the market was still weighed down, and will not gain ground in the near term. Those market players believe LME nickel prices will fluctuate at current levels, and will likely rebound briefly, but will fall once touching USD 15,400/mt.