SHFE Nickel Once Fell 2.6% after Seven Consecutive Days of Increase, and Spot Trades were Muted

SHANGHAI, July 27 (SMM) - After rising for seven consecutive days, SHFE nickel started dropping and once fell 2.59%. As of the closing of the day, the drop was 1.24%. As of CST 16:11 July 27, LME nickel fell 0.53%. 

In the spot market today, the average spot price of SMM1# refined nickel was 179,750 yuan/mt, down 3.75% compared with yesterday. Jinchuan nickel was quoted at premiums of 8,500-9,000 yuan/mt, with an average price of 8,750 yuan/mt, down 2,750 yuan/mt from a day ago. Premiums of NORNICKEL nickel was quoted at 7,500-8,000 yuan/mt, with an average price of 7,750 yuan/mt, down 2,500 yuan/mt from the last trading day. As the end of July approached, most traders rushed to lower the premiums to deliver goods.

According to SMM analysis, on the supply side, premiums of pure nickel maintained a downward trend recently, and the spot supply of pure nickel increased. In terms of NPI, the market has been in a stalemate for more than a week, and there are no signs of obvious moving trend for the prices. This is mainly due to poor downstream demand and muted market trades. On the demand side, SMM research showed that spot prices of stainless steel in Wuxi fell slightly this morning, while that in Foshan remained flat. As market transactions remained poor, spot prices are expected to stay weak in the short term and the spread between spot and futures prices is expected to narrow gradually. In terms of nickel alloys, despite of pure nickel's soaring prices, the rigid demand for it in the alloy sector still exists. To sum up, the current macro factors weighed heavily on the nickel prices, and US Fed's upcoming interest rate meeting this week will have a critical impact on the macro sentiment.