Nickel Prices Are Likely to Remain Volatile in Short Term, Stainless Steel Prices to Fall

SHANGHAI, Nov 15 (SMM) - The extremely pessimistic sentiments eased last week, and the prices of ferrous and non-ferrous commodities stopped falling.

As the nickel prices rebounded, the premiums of nickel briquette fell against nickel sulphate, and the premiums of NPI expanded over refined nickel. The domestic stocks of refined nickel declined more slowly. The falling prices and weakened demand of stainless steel will suppress the NPI prices. The nickel prices are expected to remain volatile after rebounding should there be no strong contradiction.

SHFE nickel is expected to move between 142,000-148,000 yuan/mt this week and LME nickel will fluctuate between $19,400-20,100/mt.

The frequent disruptions from the news front in the stainless steel market caused the wide fluctuations in prices, and the overall prices moved downward.

Early last week, the production resumption of Guangqing steel mill suppressed the prices, and the SHFE SS2201 contract hit the lowest point at 17,000 yuan/mt. But Guangqing suspended the production again, and the prices rebounded temporarily before moving downward again.

The stainless steel plants that previously reduced the production due to power rationing have been resuming the production, and the output increased. However, the transactions declined after the market entered the traditional off-season, and the cost support weakened amid falling raw material prices. The stainless steel prices are expected to drop. T

he SS2201 contract traded at around 17,000 yuan/mt, and the price spread between futures and spots exceeded 2,000 yuan/mt. The cash cost of 304 cold-rolled products stood at around 18,500 yuan/mt. The SS2201 contract prices were below the break-even point, so the market was bearish over the prices.