SHANGHAI, Apr 25 (SMM) - SHFE nickel prices kept dropping today. As of around 14: 52, the prices were 219,850 yuan/mt, down 7.97%.
In the spot market, the average price of SMM #1 refined nickel was 230,450 yuan/mt today, down over 5% from April 22.

According to SMM research, quotes of battery-grade nickel sulphate were 46,300-48,000 yuan/mt last Friday, up by 150 yuan/mt from two weeks ago. The market of battery-grade nickel sulphate was once again in a stalemate, and the inquiries and offers were more slack than the previous week. Quotations of mainstream nickel salt manufacturers were still firm, and the prices were maintained at 47,000-48,000 yuan/mt, which was unacceptable to the downstream.

Some salt plants with higher costs decided to suspend the production, resulting in a sharp decrease in the supply of nickel sulphate.  On the demand side, due to the falling demand for ternary batteries, the precursor factory reduced the production on a large scale, and the demand for nickel sulphate dropped accordingly. In one word, the demand and supply of nickel sulphate were both weak.
What’s more, SHFE nickel prices were supported by the low inventory regardless of the bearish outlook for metal prices brought by the Fed’s interest rate hike.
At present, the liquidity of LME nickel is still poor, and extreme price moves will probably appear. As for SHFE nickel, the prices have been fluctuating upward since last week. As of last Wednesday, the prices pulled down slightly but were still fluctuating at high levels. In addition, the shortage of nickel tightened the supply of nickel sulphate. If the output of high-grade nickel matte can increase substantially, the supply tightness of new energy products and nickel briquette will be alleviated. However, the production of high-grade nickel matte could not meet expectations last week.

To sum up, the SHFE nickel was weak in both supply and demand. The shortage of pure nickel supported the SHFE nickel prices to rise to improve the SHFE/LME price ratio. It is expected that the SHFE nickel prices may fall after the import window opens and the supply shortage is improved. However, the overall nickel prices will remain rangebound at high levels.

Disclaimer:

The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.