SMM2, March 7: in the first week of the 2020 market, after a sharp fall, nickel prices have returned to the level before the Spring Festival in successive days. The epidemic situation in various places has made the market pay close attention to the situation. The follow-up to Indonesia's mining ban last year also affected the nerves of industry personnel. how does the output of nickel pig iron change? How will the demand for stainless steel evolve? On February 7, SMM held a WeChat Group Live event. SMM analysts investigated the industry chain from the start of smelters such as electrolytic nickel, nickel pig iron and nickel sulfate, and made a corresponding analysis of the trend of nickel prices. I now collate the minutes of the meeting and share them with you.

Review and Logic of 2020 Market

For 2020, the main contradiction in the industrial chain is that after Indonesia banned the export of nickel mines, the changing trend of the output of nickel pig iron in China and Indonesia and the demand for primary nickel from the stainless steel steelmaking industry, that is, whether the nickel supply will really be tense, what is the extent of the gap or surplus, and whether the nickel industry can be comfortable enough under the competition of the Red Sea in the stainless steel industry; In terms of deliverables, Lunni stocks have continued to soar, which has recently exceeded 200000 tons. It can be said that not only some of the hidden inventories of last year have been wiped out, but even the hidden inventories of 2018 have gradually emerged. Speculators are throwing out their own chips. I think this year's market may very much return to the actual fundamentals before the emergence of a new round of positive results.

The latest views in 2020-Summary

Next, let's take a look at the variables, that is, because of the accident of the coronavirus epidemic, what has happened to the logic of the nickel industry, and which of the following points, and where these points will go. At present, the main logic of the current pessimistic mood about nickel prices in February and even the first quarter lies in the lack of favorable performance of nickel fundamentals in the current period. The emergence of the new crown epidemic laid a poor macro start in the first quarter and the further deterioration of fundamentals, and the spring price rebound that had been expected before the market was more difficult to appear.

Start-up of smelter from January to February

Electrolytic nickel: in January 2020, the national monthly output of electrolytic nickel was 14300 tons, a decrease of 10.53% over the previous month, an increase of 16.97% over the same period last year. According to the preliminary investigation and understanding of SMM, at present, the smelters in Gansu and Xinjiang are producing continuously according to the plan, the production lines of Shandong and Tianjin smelters are operating at low load, and the electrolytic nickel production lines of other smelters continue to stop production. Electrolytic nickel production is expected to be 13200 tons in February, down 7.78% from the previous month, and continues to decline in February from January. In addition to the natural number of days, it is also related to the delay in the start of construction caused by the epidemic. However, the Jilin smelter, which ceased production in the early stage, is expected to release a small amount of production in February.

Nickel pig iron: in January, the national output of nickel pig iron decreased by 4.52% to 45500 nickel tons, an increase of 6.86% over the same period last year. In terms of grade, the output of high nickel and iron in January was 38400 nickel tons, 3.93% less than that of the previous month, and that of low nickel iron in January was 7100 nickel tons, 7.6% less than that of the previous month. In January, the production of nickel pig iron manufacturers was affected by the Lunar New year holiday and the sudden epidemic situation, and the output decreased. Among them, the reduction of high nickel pig iron mainly occurred in high-cost areas such as Inner Mongolia and Liaoning. Due to the upside-down of profits and the regional closure caused by the epidemic, the transportation of raw and auxiliary materials was blocked. Some manufacturers in Inner Mongolia have suspended production during the Spring Festival. The January reduction of low nickel pig iron plant is related to the annual production reduction of some 200 series integrated stainless steel plants. As far as high nickel iron is concerned, the production of low nickel iron is slightly affected by the above factors.

In February, national nickel pig iron production is expected to be 0.63% lower than the previous month, to 45200 nickel tons. Among them, the output of high nickel pig iron decreased by 1.25% to 37900 nickel tons. Low nickel pig iron increased by 2.72 per cent to 7300 nickel tons. High-nickel pig iron manufacturers in February compared with January most production plans unchanged, but according to research and understanding, most manufacturers auxiliary materials inventory is about half a month, if affected by the epidemic logistics and auxiliary materials manufacturers can not produce and transport normally, the output is expected to decrease; the increase in low nickel pig iron production compared with January is related to the resumption of production in some 200 series integrated stainless steel plants.

Nickel sulfate: in January, the output of nickel sulfate in China was 8562 tons of metal, with a physical quantity of 38900 tons, a decrease of 17.94% from the previous month and 20.19% from the same period last year. Among them, the output of battery grade nickel sulfate is 32980 tons, and that of electroplating grade nickel sulfate is 4300 tons. The larger decline in nickel sulfate production this month is mainly related to the Spring Festival holidays. During the Spring Festival, the cathode material factory basically stopped production, and the operating rate of the precursor plant also dropped. Although some of the mainstream nickel sulfate manufacturers continue to produce, the overall production reduction in the industry is still not small. The epidemic situation has affected the production situation of individual manufacturers in January, and will have a more impact on February. Manufacturers who stop production during the holidays will basically have to wait until after February 10 to resume work, and because the downstream of the terminal is greatly affected by the epidemic situation, the actual start-up situation of the manufacturers may be worse than expected. National nickel sulfate production is expected to fall 4.21 per cent to 8202 metal tons in February from a month earlier.

The latest point of view in 2020-fundamentals

On the supply and demand side, due to the relatively small change in supply (most large and medium-sized smelters with a high proportion of domestic production produce continuously, imports, port operations are relatively normal at present, and warehouses can also enter and leave the warehouse after February 10). In particular, the downstream civilian demand of the terminal is obviously affected by the epidemic, including stainless steel products (construction, decoration, tableware, etc.). Equipment), electroplating (car and bathroom), battery (car, 3C digital). From a regional point of view, nickel and stainless steel consumption in South and East China account for a high proportion, these areas have high population density, epidemic prevention measures are more stringent than the North, civilian consumption will be more obvious.

There is one special point to consider, and that is stainless steel. Stainless steel is downstream of nickel, but it is middle reaches from the point of view of the complete industrial chain. Although it is an overcapacity industry with low profits, this fierce competition, as well as the characteristics of continuous production of steel mills, has formed a support for the demand for nickel. At a time when the epidemic is more serious, although the terminal is poor, as long as the production scale of the stainless steel plant is basically stable and the spot products of nickel, Prices in the market are supported to a certain extent. After taking into account this period, although the fundamentals of nickel is still poor, but it is not blindly a sharp decline, that is, at a time when the operating rate is no longer high, nickel does not necessarily fall with stainless steel, until the profits of steel mills can no longer be taut, announcing that they will reduce production by more, so there is still room for nickel to fall.

Future forecast-short-term: so for the late price, we think that in February is mainly a weak shock, Shanghai nickel 100000 to 110000, may be due to the bottom of the short-term long intervention has a small rebound space, but the energy is relatively limited, a small rebound may occur in the middle of the month, the speed of new cases decreases, or there is good news about other epidemic situation.

Future forecast-second quarter: the real "spring" needs to wait, mainly because of the following considerations: although the end of the epidemic cycle will usher in a reversal, but the virus is highly contagious, the duration is uncertain, and with the start of work in early February, there may be variables. However, after the resumption of the epidemic, there may still be demand for collective outbreaks after delays. In April and May, if the operating rate of stainless steel plants can pick up under the stimulation of orders and reduce the production of nickel pig iron caused by the shortage of nickel ore, there is still relatively good room for a rebound in prices. This time window is very short, but it exists, which may lead to a market in which Shanghai nickel exceeds 120000.

Future forecast-second half of the year: the second half of the year is not optimistic, but the decline is limited. For the benefit of enterprises, the impact of the domestic epidemic on the commissioning of low-cost nickel pig iron in Indonesia is limited. If the epidemic is restrained in the first quarter, then the Chinese enterprises that he can delay the pace of putting into production at most is 2-3 months. Compared with the beginning of the year, the situation of domestic nickel pig iron enterprises is more difficult in the second half of the year. Its production reduction will alleviate the gap in nickel mines, and Nife plants may occupy more initiative. Nickel mine is weak to a certain extent, the cost of domestic nickel iron down, there is space, space is limited.

To learn more about the nickel industry chain, "Please click to apply for a free trial."

Conclusion:

An unexpected epidemic has disturbed the whole of China, and the metal industry chain has also been affected accordingly. Will the nickel market change in 2020? what will be the trend of nickel demand and nickel price this year? Let's take a look at SMM "2020 (Fifth) China International Nickel Cobalt Lithium Summit" on the industry experts, corporate bigwigs and SMM analysts to take you to interpret the nickel market in 2020.

"Click to sign up:" 2020 (Fifth) China International Nickel Cobalt Lithium Summit Forum "

To sign up for the Nickel Cobalt Lithium Summit or apply for entry into the SMM New Energy vehicle / Cobalt Lithium Industry Exchange Group, please scan the QR code below:

Please note: sign up for the Nickel Cobalt Lithium Summit / apply for SMM New Energy vehicles / Cobalt Lithium Industry Exchange Group