Nickel prices supported by macro sentiment, forward surplus and short-term stable consumption is expected

SHANGHAI, Apr 13 (SMM)—Nickel prices started to trend upward last week after the sideways fluctuation for most of March. The price increase was driven by macro sentiment. The decline in yields of 10-year US Treasury dragged down the US dollar to a two-week low, which promoted the overall price rise of non-ferrous metals. However, the nickel fundamentals could hardly support the price increase. Nickel spot trading continued to be sluggish, while NPI prices weakened after the purchase period. Nickel sulphate prices temporarily stopped falling last week, but the surplus is still expected to exist throughout April. Only the LME nickel briquette inventory decreased steadily, but the domestic spot transactions of nickel briquette weakened. On April 8, CNGR announced that it will continue to expand the development of laterite nickel ore and high-grade nickel matte with Tsingshan, Indonesia. The news is still bearish for forward supply and demand. It is expected that the forward surplus cannot bring high premiums to nickel. The pricing indicators of the near-term delivery products remain to be the inventory decrease of nickel briquette and the demand for nickel plate. Nickel prices will return to fundamentals after the macro sentiment stabilises. SHFE nickel is expected to move between 123,000~128,500 yuan/mt. LME Nickel is expected to run between $16,400-16,900/mt.

Stainless steel contract prices to remain rangebound this week

Stainless steel contract prices stood around 14,300 yuan/mt early last week. Driven by the rising nickel prices, the prices stood above the 5-day moving average during the week, and slightly rose to 14,700 yuan/mt on April 9. However, the pries are fluctuated in a gap higher range from the previous period and were facing strong pressure. The spot market stabilised last week, and there was no strong momentum to support the upward movement. The stainless steel contract prices rose and fell to 14,400 yuan/mt on April 9. The stainless steel market has been stable, and there is no strong long-short contradiction. Stainless steel contract prices are expected to fluctuate between 14,250-14,750 yuan/mt this week.