Nickel Prices Still Carried Upside Momentum with NORNICKEL Nickel Being the Market Focus

SHANGHAI, Mar 2 (SMM) - Overnight SHFE 2204 nickel rose slightly and once gain tested the 180,000 yuan/mt mark. On the supply side, the current and future trade issues of NORNICKEL nickel are worth attention, as the trade process takes longer time than before. Spot nickel sulphate supply was relatively tight, and the traditional high is about to come, hence the profits are expected to recovery continuously. On the mining end, the supply of laterite nickel ore will stay tight until the rainy season ends, hence the prices carry obvious upside potential. The supply of nickel concentrate was tight, and the coefficient remained high. Nickel matte production has not achieved mass production. On the demand side, the stainless steel production lines in Xiangshui county, Jiangsu Province are put into production, which was ahead of schedule. The volume of dissolved nickel sulphate stood high. Overall, nickel prices still carry some upside momentum.

Pure nickel: SHFE nickel futures fluctuated sideways around the daily moving average in morning trade, and the spot market was in premiums. Jinchuan nickel was in premiums of 1,500-1,800 yuan/mt to SHFE 2203, with an average of 1,650 yuan/mt, which was unchanged from a day ago. NORNICKEL nickel was in premiusm of 800-900 yuan/mt over SHFE 2203, an average of 850 yuan/mt, down 100 yuan/mt from a day ago. The spot transactions were thin as the traders were preparing for the shift of SHFE contract as the quotation benchmark. In terms of nickel briquette, the product started to be quoted against SHFE 2204 since last week. Market supply was still tight, and the quotations were mainly in premiums of 3,500-4,000 yuan/mt over SHFE 2204, and there were barely any transactions in the spot market.

NPI: As of march 1, SMM average price of high-grade NPI was 1,495 yuan/mtu (ex-factory, tax included), flat from a day ago. Intraday market was quiet, with few transactions and scarce quotes. On the demand side, stainless steel mills' centralised procurement has ended, hence the restocking demand was weak, resulting in few inquiries, In addition, stainless steel spot prices tended to stabilise after dropping, and the profit margin of steel mills has been narrow, and they were unwilling to accept high-priced raw materials. On the supply side, there was almost no spot inventory at NPI factories at present, and the market supply was quite tight, which offered certain support for the prices of NPI. At the same time, the current nickel prices fluctuated wildly, and the price difference between NPI and pure nickel has been narrow. The market reservoir effect waned. NPI prices are expected to remain volatile in the short term.

Stainless steel: In the spot market, stainless steel futures prices rebounded slightly yesterday, but met resistance at around 17,800 yuan/mt, and gave up all morning gains in the afternoon trading. The contract closed the day at 17,555 yuan/mt. In the spot market, the prices of 304 CRC were reported at 18,300-19,100 yuan/mt, and the prices were basically stable. In terms of HRC, Delong began to deliver its backlog orders received before the Chinese New Year, and the goods arrived in the market one after another. As such, the prices of HRC dropped slightly to 18,300-18,700 yuan/mt, and the spread between CRC and HRC basically returned to zero. Based on the current transaction situation, the spot transaction of stainless steel was still quite thin. As of 10:30 am (Beijing time), the SHFE SS 2204 contract stood at 17,775 yuan/mt, and the spot premiums in Wuxi were 695-1,495 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt)