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[SMM point of view] can the fundamentals of Shanghai Nickel continue to rise after several times approaching the 120000 mark?
Sep 7,2020 15:33CST
The content below was translated by Tencent automatically for reference.

SMM9 March 7: today, Shanghai Nickel opened slightly higher and went lower again, spitting out earlier increases. Shanghai Nickel approached the 120000 mark again in the morning, but then fell back. by the end of the day, the main contract of Shanghai Nickel 2011 was at 119080 yuan / ton, a slight drop of 0.04%. In the spot market, as downstream users have already made purchases on Friday, the transaction situation has declined somewhat today, with traders saying that it is mixed.

Prior to this, the sharp correction in the prices of nickel and various metals was dominated by macro factors such as the collapse of US stocks and the appreciation of the US dollar, with a range of appropriate recovery and adjustment in the short term; nickel fundamentals were temporarily stable, but stainless steel prices tended to peak at a high level. the upward pressure on nickel prices will increase, but at the same time, the space for pullback will be limited; at present, the short-term fundamentals of nickel are good, and in the long run, they are better than originally expected. In the third quarter, 300 series stainless steel high output assist high nickel pig iron from leftover to deficient, fourth quarter or tight balance, the surplus is less than originally expected, so some nickel market fundamentals of nickel pig iron are good; in terms of pure nickel, although consumption is not good, however, the reduction of domestic nickel spot imports has a certain adjustment to the market, so that the domestic social inventory is basically balanced, and the market performance is relatively stable. It is estimated that this week, Shanghai nickel is 117500-124000 yuan / ton, Lunni is 15000-15800 US dollars / ton.

Institutional point of view

ITC Futures:

The rebound of the dollar index put non-ferrous pressure on nickel prices after profit closure, but there is still support in the face of nickel prices, focusing on the trend of non-ferrous plates in the near future. From a fundamental point of view, domestic nickel ore inventories are still low, and the tight pattern of nickel ore supply has not been alleviated, while the Philippines is about to enter the rainy season, and the enthusiasm of nickel-iron factories to prepare stocks is high, so the performance of nickel ore prices is strong, and traders are willing to keep selling at high prices. In terms of Ferro-nickel, the strong mineral price still forms a strong support to the price of ferronickel, and the price of ferronickel continues to rise, which is close to the level of pure nickel. Although a number of production lines have been put into operation in the Indonesian industrial park since the end of the second quarter, the amount of ferronickel returned to the country is not as expected for the time being. With the continuous recovery of stainless steel production, the demand for steel mills to prepare goods is rising, and there is a shortage of supply in the ferronickel market. On the demand side, the inventory of stainless steel continues to decline, the output of 300 series stainless steel continues to increase, and the supply of stainless steel tends to support steel prices. The market is more optimistic about the future, focusing on stainless steel inventory changes and downstream consumption.

Huatai Futures:

The price of nickel is treated with caution in the short term. At present, the supply and demand of nickel is strong, the prices of nickel ore, high nickel iron and scrap stainless steel continue to rise, the supply of nickel ore in the middle line is tight, the positive feedback of stainless steel demand on nickel price may continue to strengthen, and the domestic demand for new energy vehicles is also gradually recovering. sales of new energy vehicles in Europe are growing rapidly, and nickel prices may be easy to rise but difficult to fall in the third quarter. If the new production capacity of Xiangyu stainless steel in Indonesia is put into production as scheduled, or the domestic production of 300 series stainless steel remains at the current high level, the excess supply of nickel and iron in the fourth quarter will be limited. Moreover, the current supply of nickel in the Philippines and Indonesia remains tight, and the possibility of continuing to exceed expectations is low. On the contrary, once part of the supply is affected, the existing tight balance will be broken, which is good for nickel prices. In the middle line, as the new production capacity of Ferro nickel in Indonesia is put into production one after another, the supply of ferronickel in the future will still become significantly excess, the price of nickel may still fall again, and the global nickel supply may need to clear part of the production capacity before the price of nickel can reach a real bottom.

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