SHFE/LME Nickel Price Ratio Dropped after Hitting Highs

SHANGHAI, Jan 14 (SMM) - The SHFE/LME nickel price ratio hit a high of 7.55 at the beginning of the week, and the import and export window both re-opened, facilitating comparatively high import profits for traders. Meanwhile, the domestic nickel plate maintained high premiums. The aforementioned two factors prompted the nickel plate in the bonded zone to flow into the domestic market. In addition, the downstream rigid demand has been moderate, hence the nickel plate that enter the market has almost been digested.

Looking into the next week, the import and export windows shall re-open again in order to allow a smooth domestic spot market. However, as the downstream was less willing to purchase the high-priced pure nickel denominated in US dollars, the supplies may be transferred to the Europe where the demand has been robust and the premiums stand high. The domestic supply may tighten by then.