SMM Nickel Market Daily Review (2015-3-16)

SHANGHAI, Mar. 17 (SMM) – SMM #1 refined nickel prices were RMB 104,200-105,000/mt on Monday. Spot prices increased and trading turned more brisk Monday morning, with most deals done at RMB 104,300-105,000/mt. In the afternoon, prices held steady. Most transactions were made between traders, and downstream buyers only bought in small amounts. Mainstream traded prices were RMB 104,500-105,100/mt in the afternoon.

12 of the 30 market players surveyed by SMM are bullish about this week’s nickel prices, expecting LME nickel to trade at USD 14,150-14,400/mt, noting that NPI producers in Shandong’s Linyi have not yet resumed production from the environmental protection crackdowns and the declining supply will support prices. Besides, inspections will also be conducted in Inner Mongolia, presaging further cut in production.

10 respondents see nickel prices to consolidate at USD 14,000-14,150/mt. These players said that nickel supply still exceeds demand despite closures in Shandong. Most stainless steel mills have reportedly built sufficient NPI stocks, meaning downstream demand is unlikely to show significant improvement. Meanwhile, high LME nickel inventories will also prevent prices from rising sharply.

8 of the surveyed expect LME nickel to fall to USD 13,800-14,000/mt, arguing that the plunge in crude oil prices will exert a drag on nickel prices. Although NPI producers in Linyi remained closed, these players believe the shutdowns will not last long and the brief decline in NPI production may have limited impact on prices. In addition, weakening nickel ore prices will also weigh down nickel prices.