SHANGHAI, Feb 7 (SMM) - The most-traded SHFE 2203 nickel contract closed at 163750 yuan/mt on the last trading day before the Chinese New Year (CNY) holiday, marking a weekly drop of 7.16%. LME nickel rallied, and closed at $22920/mt as of February 4, up 3.34% on a weekly basis. SHFE nickel is expected to rise to above 170,000 yuan/mt.
There were no transactions of pure nickel during the holiday. On a global scale, pure nickel supply was still tight, with LME nickel inventory falling 3096 mt or 3.5% to 87504 mt during the holiday, a historical low. Though there will be some arrivals post the holiday, the short supply of pure nickel will sustain.
In addition, the supply and demand of nickel sulphate and NPI are relatively balanced for the moment. And the prices are likely to rise slightly amid post-holiday restocking. Pure nickel inventory is unlikely to rise substantially in the near term, hence the inventory will remain low post the holiday, and the spot premiums will also hover at a high level.
