Nickel Prices Pulled Back after Surging, Likely to Turn Volatile after Market Sentiments Cool

SHANGHAI, Nov 29 (SMM) - The nickel prices rose from a low level to above 15,000 yuan/mt, which turned the market sentiments bullish. However, the short-term fundamentals were basically unchanged. The price rally was mainly due to the macro sentiment recovery and low nickel inventory.

Indonesia’s ban on raw material exports and US governmental subsidies for new energy vehicle development also drove up the prices. On the fundamentals, the production of nickel sulphate and stainless steel was stable, and the demand showed no sign of decline, while the growth in supply slowed down.

Due to the low SHFE/LME nickel price ratio and closed import window, the volume of imported nickel is likely to be low this week. If the prices rebound to around 145,000 yuan/mt, the nickel inventory may drop.

The prices may rise further on low inventory. The overseas pure nickel inventory is expected to drop further, and the Backwardation structure will expand. SMM will monitor whether the overseas investors will continue the speculation. SHFE nickel is expected to trade between 144,000-148,000 yuan/mt this week, and LME nickel may trade between $19,700-20,300/mt.