SHFE Nickel Prices Dropped over 3% due to the Weak Demand

SHANGHAI, Aug 24 (SMM) - As of 9:46 a. m., SHFE nickel prices dropped 3.06%.

In the spot market, on August 23, the average price of SMM #1 refined nickel was 181,600 yuan/mt, down 0.16% from the previous trading day.

Spot premiums of Jinchuan nickel were 3,500-5,500 yuan/mt, and the average price stood at 4,500 /mt, down 900 yuan/mt from the previous trading day. Premiums of NORNICKEL nickel stood at 2,600-3,000 yuan/mt. The average price was 2,800 yuan/mt, an increase of 150 yuan/mt from the previous trading day. Spot premiums stayed almost unchanged and the trading was slack amid the high futures prices and the weak downstream demand.

According to SMM research, on the supply side, at present, the domestic production of refined nickel maintains normal, and the SHFE/LME price ratio has recovered. In terms of NPI, the decline in ore prices earlier eased the NPI plants’ losses, but the plants were still suffering losses.

On the demand side, the stainless steel trading improved compared with the beginning of the month driven by the rising futures prices. The impact of power rationing in Zhejiang, Jiangsu and other places on the processing plants may be gradually weakened. In terms of alloys, the military sector still had rigid demand, but the demand from the civilian sector was sluggish. To sum up, the current downstream demand is still poor, providing weaker support for nickel prices.