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[SMM point of view] Shanghai Nickel V-shaped recovery part of the decline is expected to be dominated by the recent shock consolidation of nickel prices.
Sep 11,2020 16:28CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

SMM9 March 11: today's nickel price trend V word, in the afternoon to recover some of the decline, as of today's day close, Shanghai nickel main contract 2011 at 116150 yuan / ton, a decline of 0.33%, once fell to 114730 yuan / ton, the lowest since August 20. On the spot side, the trend of nickel futures today continued to be under pressure, with the morning market fluctuating to around 115000 yuan / ton, but further bottoming out of nickel prices has limited stimulus to the spot market. It is reported that although the inquiry situation in the morning market is OK, the actual hanging order situation is not as good as that of yesterday, and only some traders can make a deal.

SMM believes that macro factors triggered market panic, not only gold and silver and other safe-haven assets were affected, basic metals were also affected. From a fundamental point of view, the peak of stainless steel prices and increased profit pressure are the factors restricting the upward rise of nickel prices, but they are not the decisive factors in the near future. spot nickel prices are strong, and nickel pig iron has little room to fall. There is still a gap between the supply and demand of primary nickel in the third quarter, so the decline in nickel prices may not be a long-term trend. at present, macro sentiment and bears have the upper hand, making it difficult for nickel prices to rebound quickly. It is expected that the near-term nickel price in the current position near the shock consolidation is mainly, or can look forward to later repair.

Institutional point of view:

Huatai Futures: nickel price is in the adjustment stage in the short term, but the overall uptrend is not over yet. 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. 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.

Jinyuan futures: yesterday the nickel price continued to fluctuate lower, and the night market was also at a low level. Overall, the upward trend of nickel price volatility has come to an end. Nickel prices have fallen by nearly 5% since we prompted long positions to make a profit. For the future, we maintain the end of the uptrend in nickel prices and will open a new downside view after the shock. The main reason is that with the gradual increase of ferronickel production capacity in Indonesia, the impact on domestic supply will become greater and greater, the overall supply will begin to exceed demand, and the pattern of oversupply will begin to put pressure on nickel prices after a certain degree of inventory accumulation. Therefore, the future nickel price is likely to fall after the high shock, but it is still mainly wait-and-see, waiting for the accumulation of inventory, until a greater pressure on the price.

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