Nickel Prices to Stand High amid Supply Shortage in August

SHANGHAI, Aug 4 (SMM) - Nickel prices fluctuated higher in July and reached a new high at 148,780 yuan/mt since February this year. Nickel futures closed at 146,900 yuan/mt on July 31, up 8,840 yuan/mt or 6.4% from the end of June.

Nickel stocks across the LME listed warehouses kept falling to 214,632 mt on July 30, down 17,844 or 7.7% mt from June 30. The stocks across SHFE warehouses increased to 6,939 mt on July 23, up 839 mt or 13.75% from June 28.

The market has not seen obvious long or short trend, and funds are mainly in short-term operations. The current downward room is limited, and the overall prices are likely to keep rising with the fundamental support.

At present, the focus of nickel-based market transactions is still on the stainless steel and new energy markets. Nickel demand by stainless steel market is expected to decline in August, as the production will be reduced amid the power curtailment.

However, the overall stainless steel production is still scheduled high, and the raw material supply is not loose. The production cut on stainless steel will support the prices to stand high amid the high demand.

The new energy production line will also maintain high demand for nickel in August, with the self-dissolving amount of nickel briquette at 11,000-12,000 mt/month (ni content). Therefore, nickel supply is expected to remain in short in August.

The recent severe pandemic in Indonesia may affect the construction of upstream new capacities and the production progress. Nickel prices are expected to move between 140,000-152,000 yuan/mt in August.