SHFE Nickel to Fluctuate at Highs after Gaining More than 3% amid Tight Supply

SHANGHAI, Apr 27 (SMM) - SHFE nickel rebounded over the past two days after a brief slump, rising more than 3% in intraday trading today.
 The average spot price of SMM1# refined nickel was 225,600 yuan/mt today, down over 2% from April 25.

In terms of supply, the clearance volume of pure nickel was still small, while the operating rates of domestic nickel smelters have not recovered. Domestic pure nickel supply remains tight, and spot premiums are high. Spot NPI supply remains in shortfalls amid falling imports. The spot supply of nickel sulphate is tight and is unlikely to recover soon due to severe losses at producers.  

On the demand side, the spot transaction of Jinchuan nickel has improved after SHFE nickel's correction. Recently, alloy and other downstream producers have purchased refined nickel. However, orders at downstream producers declined under the impact of the pandemic. In terms of stainless steel, the recent spot transactions are poor.

Despite bearish macro sentiment and poor demand caused by the pandemic, tight supply should keep nickel prices at highs.