SHANGHAI, Sept. 22 (SMM) – SMM #1 nickel prices were between RMB 74,600-75,500/mt. Discounts of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were zero in the morning. Discounts of Russian nickel were around RMB 400/mt. Traders sold actively, but downstream buyers bought modestly at lower prices, with trading quiet and traded prices between RMB 74,500-75,200/mt. Nickel futures prices rebounded in the afternoon, and traders sold proactively, with traded prices between RMB 75,000-75,400/mt. Jinchuan lowered prices by RMB 1,500/mt to RMB 75,500/mt.
SMM survey of 30 market players find that 4 are bullish toward zinc prices, 18 are neutral and 8 are pessimistic.
The 13% optimistic ones see LME nickel prices rise to USD 9,900-10,100/mt. The Fed left interest rate untouched at its September meeting, weighing on the US dollar and bolstering base metals. China’s A-share market returned to rational range as Chinese financial markets stabilize. NPI producers continued to cut output, which is expected to boost nickel prices. Import window has closed. When combined with losses at traders, supplies decreased. Demand, however, will improve ahead of China’s National Day holiday. SHFE 1601 nickel contract prices will rebound to RMB 78,000-79,500/mt.
60% believe LME nickel prices will fluctuate between USD 9,700-9,900/mt. Interest rate hike by the Fed is still likely later this year in light of upbeat economic indicators from the US, bolstering the US dollar. Besides, production at Chinese manufacturers did not improve. But market panic alleviated with eurozone recovery and stabilization in Chinese financial markets. SHFE 1601 nickel contract prices will move between RMB 76,500-78,000/mt.
27% are bearish, seeing LME nickel prices fall to USD 9,600-9,700/mt. They think the Fed will raise interest rate sooner than later as major economic indicators in the US continued to improve. China’s economy will unlikely turn around despite stabilization in the financial markets. Eurozone economic recovery fell short of market expectations, which should trigger additional QE measures. Some 10,000 mt of nickel will flow to the market after delivery, and weakening nickel ore prices will not underpin nickel prices. SHFE 1601 nickel contract prices should drop to RMB 75,500-76,500/mt.