SHANGHAI, Aug 19 (SMM) – Trades of ferronickel across Chinese markets are expected to stem the poor performance that began since the start of the month and pick up later this week, as most steelmakers will begin stockpiling raw materials for a new month, SMM believes.
The possibility that some steelmakers will cancel their routine procurement to drain their existing stocks to normal levels, however, grows concerns about the extent of the improvement in demand, after those steelmakers stepped up purchases to extend the raw material inventory cycle from 1-1.5 months to 2 months.
As of Friday August 16, the discount of high-grade ferronickel against refined nickel widened to a new low of 170.5 yuan/mtu, showed SMM assessments, but trades remained anemic.
Quotes from traders were heard at 1,120 yuan/mtu on August 16, tax included and on a delivery-to-factory basis, after nickel prices rallied.
