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Are bad shells coming one after another to Shanghai Nickel in trouble?
Sep 27,2020 09:09CST
translation
Source:Mandarin Finance and Economics
The content below was translated by Tencent automatically for reference.

SMM News: since September, the trend of Shanghai nickel can be said to be as low as the dust, and the futures price has fallen all the way from the 120000 front line. At present, the 110000 line is in danger, and the range has fallen by more than 7% at one time. This week, Tesla CEO Musk once again stressed the importance of nickel in new energy car batteries, in addition, the tight supply of nickel ore continues, but nickel prices do not seem to be moved. Recently, what factors are holding back Shanghai Nickel? Will futures continue to be pessimistic?

The "hoop spell" at the mine end is difficult to remove. Ferro Nickel has loose expectations.

Indonesia officially banned mining in 2020, and most of the domestic nickel ore imports depend on the Philippines. However, affected by the epidemic, the production and export of nickel mines in the Philippines have been obviously restricted. China's imports of nickel mines from March to May were less than 2 million tons, the lowest level in the same period in recent years. The blockade of the epidemic in the Philippines has been lifted in the past two months, but local weather problems affected the shipment of nickel mines in August, and the domestic port epidemic prevention policy was tightened at one time, resulting in a decline in the number of nickel mines arriving in Hong Kong, causing nickel ore port inventories to remain low. Affected by this, the price of nickel ore also continues to strengthen, providing cost-end support for the nickel ore-nickel iron-stainless steel industry chain. In addition, the main producing areas of nickel mines in the Philippines will enter the rainy season in October every year, nickel ore shipments will be reduced, the follow-up port nickel ore inventory is still not optimistic.

Boosted by the continued strength of nickel ore prices and the early demand for high production of stainless steel, Ferro-nickel prices have also strengthened all the way in the early stage, but recently, stainless steel prices have obviously dropped, steel mill profits have been compressed, and acceptance of high-priced ferronickel has declined. At present, the tender price of Ferro Nickel has dropped slightly, and the transaction is more deadlocked. Although the export of nickel mines is banned in Indonesia, the progress of local production of nickel and iron is accelerating. China's imports of nickel and iron have soared this year, with the latest customs figures showing that China's imports of nickel and iron more than doubled in August, up from a year earlier. The market is generally worried about the future release of Ferro-nickel in Indonesia and its inflow into the country, and the impact on domestic high-cost ferronickel production capacity will be increased in the follow-up.

Stainless steel inventory accumulation? The positive feedback of the industry chain is weakened.

Industrial products generally showed off-season performance in the second quarter. Jinjiu Silver Ten is the peak season of traditional consumption, and the early market has higher expectations for the peak season. Stainless steel traders have signed a large number of orders with steel mills because they are optimistic about consumption in the third quarter. The whole industrial chain showed a good state of de-warehousing, which once pulled the price of stainless steel to continue to strengthen. However, under the disturbance of the epidemic, the pace of domestic industrial product consumption may be disturbed, and the quality of industrial products in the peak season this month is obviously not good. Recently, stainless steel stocks in Foshan and Wuxi have accumulated, suggesting that the demand for stainless steel has not improved significantly, and the stainless steel market has not been as expected since September. However, nickel mine prices remain high, nickel iron prices do not have an obvious correction, steel mill profits have been significantly compressed, causing the market to worry about subsequent steel mills may have production reduction behavior, the positive feedback of the industry chain on the formation of nickel prices has been seriously weakened. However, it is worth noting that the current production reduction conditions of stainless steel manufacturers are insufficient, the short-term and follow-up production scheduling plans are still good, and some 300 series of new or transposed production capacity are planned to be put into production in the fourth quarter. In addition, the continued weakness of nickel prices to ferronickel discount has expanded to the highest level in nearly two years, which may boost demand for refined nickel.

Stainless steel temporarily stops falling. Will nickel prices continue to be pessimistic?

On the occasion of the first anniversary of the listing of stainless steel futures, stainless steel stopped falling and rebounded in the past two days, but the dollar index continued to strengthen, and nickel prices were dragged down by pessimism in the non-ferrous plate, and the rebound was relatively limited. With October approaching, Philippine nickel mine exports may begin to be blocked, electrolytic nickel will expand favorable demand for nickel iron discount, and the market is still looking forward to the follow-up consumption of stainless steel, and steel mills are not expected to reduce production on a large scale, if there are no more systemic risks, nickel prices are pessimistic in the short term or difficult to speak of.

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