SMM Analysis: Nickel remains deficit in 2018

SHANGHAI, Dec 25 (SMM)－SMM forecast the global nickel market to remain in a deficit in 2018 with 50,000 mt of shortage.

Prices wise, we expect LME nickel to average at $11,000-11,500/mt next year with a trading range of $9,000-14,500/mt. SHFE nickel, on the other hand, is expected to trade 75,000-115,000 yuan/mt in 2018.

As of the end of November, nickel inventories at LME and SHFE warehouses stood at some 420,000 mt. Global inventories amounted to some 480,000 mt if we consider those at bonded areas. However, the inventory consumption cycle has come down to 2.6 months, from 4.2 months in 2015.   

With such destocking speed, stable stainless steel demand growth, and the bottleneck seen in supply of nickel cathode, pellet and briquette, SMM forecast LME nickel price to go up by 8% next year.

In addition, we see a changing nickel supply pattern as it moves toward nickel pig iron (NPI). SMM forecast NPI to account for 32% of primary nickel supply in 2018.

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