SMM Nickel Market Daily Review (2015-5-25)

SHANGHAI, May 26 (SMM) – SMM #1 nickel prices were between RMB 94,700-98,800/mt. Jinchuan Group did not adjust prices as nickel prices dropped slightly then leveled out in the morning. Traders held back goods, leading to tight Jinchuan nickel supply. Downstream buyers turned to Sumitomo and Norwegian nickel, with premiums of Russian nickel largely unchanged. Trading turned brisk, with traded prices between RMB 94,800-98,800/mt. Traders were unwilling to sell in the afternoon, and premiums for Jinchuan nickel rose slightly on tight supply. Russian nickel inventories also fell noticeably. Some large traders held Russian nickel inventories in bonded zone, but traders were unwilling to purchase at high prices. Downstream buyers purchased as needed, with trading muted and traded prices between RMB 94,900-99,000/mt.

SMM surveyed 30 market players to find that 6 are bullish toward nickel prices this week, 15 are neutral and 9 are bearish.

The 20% optimistic think LME nickel prices will rise to USD 12,900-13,100/mt. China’s stimulus measures will boost domestic economy, allowing nickel prices to rally. A large number of longs enter the market. Growing demand for nickel ore also supported nickel prices. SHFE 1507 nickel contract prices will rebound to RMB 100,000-102,000/mt.

50% are neutral, believing LME nickel prices will move between USD 12,600-12,900/mt. The US dollar index rebounded on improving economic indicators from the US, weighing on base metals prices. The release of domestic NPI capacity will also weigh on nickel prices. But any downward room is limited as demand grows. Meanwhile, Jinchuan Group held back goods at lower prices. SHEF 1507 nickel contract prices will fluctuate between RMB 97,000-100,000/mt.

The 30% pessimistic ones see LME nickel prices falling to USD 12,500-12,600/mt this week. A strengthening US dollar index pushed down base metals prices. Soft domestic demand, combined with the release of NPI capacity will put pressure on nickel prices. A large inflow of imported nickel expected will pull down spot premiums. SHFE 1507 nickel contract prices should fall to RMB 95,000-97,000/mt.