Nickel Spot Market Remains Weak amid High Nickel Prices

SHANGHAI, Apr 7 (SMM) - On the supply side, due to the continuous impact of the pandemic, refined nickel manufacturers slightly reduced the production in March. Meanwhile, the refined nickel supply remained tight because of the import loss. As the transportation problem has not been solved yet due to lingering domestic pandemic, the spot trade of refined nickel was mainly the transferring of ownership. In terms of NPI, the prices remained at the high level, and the mainstream acceptable prices of upstream and downstream were still quite diverse. On the demand side, the current high refined nickel prices and the shortage of nickel briquette supply sustained the high prices of nickel sulphate. There were still differences in acceptable prices between upstream and downstream, and nickel sulphate manufacturers were less interest in the procurements of raw materials. In terms of stainless steel, the logistics and delivery was continuously restricted in Wuxi as the spot market was locked down because of the pandemic. The supply and demand across upstream and downstream sectors were both weak.

Refined nickel: as the recent futures prices deviated from the spot supply and demand to a large extent, SMM has suspended the premium/discount quotation of 1# Jinchuan nickel, 1# imported nickel and nickel briquette. According to the actual investigation, SMM maintains the quotation for 1# refined nickel, 1# Jinchuan nickel and 1# imported nickel. This circular complies with IOSCO standards. Yesterday, Jinchuan nickel was quoted at 219300-220800 yuan/mt, with an average price of 220050 yuan/mt, 2950 yuan/mt lower than last Friday. NORNICKEL nickel quoted 219500-220500 yuan/mt, and the average price was 3000 yuan/mt lower than last Friday. Nickel briquette quoted 216800-218300 yuan/mt, with an average price of 217550 yuan/mt, 2950 yuan/mt lower than last Friday. At present, the trade mode was mainly transferring of ownsership as the transportation problem had not been solved due to the pandemic in Shanghai. Jinchuan and NORNICKEL nickel saw little deal today. Secondly, the futures prices have not returned to the fundamentals yet, so that the downstream was cautious about procurements. In terms of nickel briquette, the shortage of market supply remained unchanged due to the long-term import loss, amid the unrestored in-house dissolution of nickel briquette, so that the manufacturer's procurement willingness was not strong.

NPI: on April 6, the average price of SMM high-grade NPI was 1635 yuan/mtu (ex-works, including tax), which was flat compared with the average price of the previous trading day. Domestic  steel mills in north China contributed some transactions of NPI yesterday with the price of 1625-1630 yuan/mtu (including tax, delivery to the factory). At present, the nickel price is still at a high level, and the quotation of NPI is quite different. The upstream and downstream are still in intense wresting regarding the acceptable prices. From the perspective of supply and demand, under the tight supply of ferronickel and refined nickel, high-grade NPI had obvious advantages to make up for the consumption, which also led to obvious price difference. In the short term, the prices of NPI are expected to maintain at this level.

Stainless steel: the SS stainless steel contract rose slightly, and tested 20600 yuanmt at noon. In Wuxi stainless steel spot market, logistics and delivery was still restricted as many places like East Steel City and Jiangsu Nan Fang were still locked down and people worked from home. However, some traders who can work at present said that the transportation was quite restricted within Wuxi, and it was impossible to deliver outside the province. 304 cold-rolled coil was reported as 20600-20800 yuan/mt, and 304 hot-rolled coil was reported as 19800-20000 yuan/mt; SS 2205 contract (10:30 am, Beijing time) was 20425 yuan/mt, Wuxi stainless steel spot was in premium of 345-545 yuan/mt. (deburred edge = burr edge + 170 yuan/mt).