[Ni Premiums] Is Demand Growth behind New High of Nickel Import Premiums? SMM Exclusive

Published: Jun 10, 2015 16:37

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Premiums on nickel imported into China surged to $150 per tonne on Jun. 5, a new high since July 2012, according to SMM data. Is demand growth the driver behind the sharp gain in premiums?

SHANGHAI, Jun. 10 (SMM) – Premiums on nickel imported into China surged to $150 per tonne on Jun. 5, a new high since July 2012, according to SMM data.

Is demand growth the driver behind the sharp gain in premiums?

“The answer is no, and the surge, up from a high of $135 per tonne this mid-January, is due mainly to low inventories in China’s bonded zone and inflating margins on imports,” SMM’s nickel group explains.

The profitable Shanghai/LME nickel price ratio and supply shortfalls in China’s market, resulting from Jinchuan’s reluctance in sales, stimulated import interest, SMM says.

“The premiums are likely to drop as China's nickel demand now gives no support to the rise,” SMM foresees, citing soft economy growth and stainless steel anti-dumping measures by foreign countries as main reasons.

Supply growth from Jinchuan Group and the falling price ratio will also put a brake on growing premiums, SMM adds.

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