SMM Nickel Market Daily Review (2015-4-20)

Published: Apr 21, 2015 09:31

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SMM #1 nickel prices were between RMB 92,700-94,500/mt.

SHANGHAI, Apr. 21 (SMM) – SMM #1 nickel prices were between RMB 92,700-94,500/mt. Nickel prices fell in the morning. Some traders held prices firm, but increasing supply weighed down premiums of Jinchuan nickel. Downstream buyers purchased as needed, with trading muted and traded prices between RMB 92,600-94,100/mt. Spot nickel prices dropped further in the afternoon, causing traders to reduce supply and left spot premiums to stabilize. SHFE 1507 nickel contract prices were RMB 3,000/mt above 1505 nickel contract prices on the Wuxi electronic trading. Downstream buying interest improved as nickel prices inched lower, with traded prices between RMB 92,000-93,700/mt.

SMM surveyed 30 market players to find that 6 are bullish toward nickel price trends this week, 16 are neutral, and 8 are pessimistic.

The 20% optimistic market players believe LME nickel prices will move between USD 12,750-13,000/mt. A falling US dollar index will positively affect base metals prices. China’s metal demand will improve as the April peak season set in. Major economic indicators in April are also promising. The PBOC lowered deposit reserve ratio by 1 percentage point. Meanwhile, nickel ore and NPI inventories fell to a low. Strict environmental protection inspections have affected NPI output, which will bolster nickel prices. Total positions on SHFE nickel reached some 120,000, but SHFE nickel capacity is only 46,000, which will force a large number of shorts to leave the market. SHFE nickel prices should climb to RMB 96,000-96,500/mt.

The 53% neutral ones see LME nickel prices moving between USD 12,500-12,800/mt. The PBOC lowered deposit reserve ratio by 1 percentage point on recent sluggish economic indicators. Commencement of domestic infrastructure construction projects will boost demand for base metals. But growing nickel ore supply will weigh on nickel ore prices. Falling stainless steel prices and high inventories will allow stainless steel plants to push down nickel prices. SHFE 1507 nickel contract prices are expected to fluctuate between RMB 95,000-96,000/mt.

27% are bearish, thinking LME nickel prices will drop to USD 12,300-12,500/mt. Despite stimulus measures from China, weak demand will weigh down nickel prices. Some NPI producers restarted production, which will increase NPI output. Weakening stainless steel prices, however, will allow stainless steel prices to lower bid prices for nickel. SHFE 1507 nickel contract prices should fall with LME nickel prices below RMB 95,000/mt.

nickel prices

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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