SHANGHAI, Jul. 23 (SMM) – In Shanghai, transactions improved due to rebounding LME nickel prices. LME nickel prices touched USD 14,285/mt immediately following opening, and Jinchuan raised ex-works prices by RMB 1,000/mt, to RMB 99,500/mt, with #1 nickel prices between RMB 98,600-99,700/mt. Spot prices rose further in the afternoon, with Jinchuan nickel prices between RMB 99,700-99,900/mt and Russian nickel prices between RMB 98,700-98,900/mt. But as LME nickel prices fell from USD 14,320/mt, to USD 14,185/mt, transactions muted, and were mainly made among traders.
SMM surveyed 36 market participants and found that 50% believe LME nickel prices will rebound this week, moving between USD 14,300-14,500/mt. LME nickel prices outperformed other base metals last week, and have ability to rebound as a large number of shorts closed positions, expected to touch USD 14,500/mt. Although China has massive NPI capacity, over 50% stainless steel output worldwide needs other nickel raw materials with the exception of NPI, and nickel capacity worldwide has almost suspended production, which is favorable for LME nickel prices.
31% market players believe LME nickel prices will continue to hover between USD 13,800-14,300/mt. Nickel supply and demand worldwide are balanced. Although LME nickel inventories continued to hit record highs, China's domestic nickel and NPI inventories have been falling. In this context, LME nickel prices will lack momentum to rise.
The remaining 19% believe LME nickel prices will fall to USD 13,500-13,800/mt again this week. They are pessimistic towards China's latest PMI in the low demand season for base metals, and market caution will distress base metals prices. Besides, July and August are low demand season for stainless steel, and RKEF NPI capacity of Guangxi Jinyuan, Jiangsu Baotong and Inner Mongolia Xinhualian will reach operation, which is unfavorable for nickel prices.