Review of Nickel Market Restocking Progress ahead of National Day Holiday [SMM Review]

SHANGHAI, Sep 29 (SMM) - 

Pure nickel: At present, the market is more concerned about the restocking progress of pure nickel under the background of the traditional peak season in September and October, as well as the approaching National Day holiday. The downstream fields of pure nickel mainly include special steel, stainless steel, nickel salt and others. According to the SMM research, although the special steel sector has a higher tolerance for nickel price, it was still restricted by the high nickel price to some extent. Meanwhile, the industry generally does not have the habit of building stocks before the festival or even in usual time, while some plan to reduce the production during the holiday. Secondly, the stainless steel manufacturers usually stockpile NPI and ferronickel during this period.

In terms of nickel sulphate, in light of the recent high nickel price, the demand for nickel briquette for the production of nickel sulphate has also decreased significantly. With the improvement of MHP cost efficient, many salt manufacturers have adjusted their raw material portfolio.

In other downstream sectors, due to the sharp fluctuations in nickel prices this year, the orders from the NI-MH battery sector have been less than expected. Players in this sector mainly purchase pure nickel on demand, and the orders weakened again after nickel prices surged in September. To sum up, the market players mostly purchased pure nickel on demand amid high nickel prices. 

Nickel sulphate: The market players have finished the restocking nickel sulphate for October. Supply of spot cargoes in the battery-grade nickel sulphate market has been relatively low. Except for in-house production by integrated manufacturers, most purchases in the market were made in the form of long-term orders with certain pricing scheme. The spot market was relatively quiet. The negotiations over long-term orders have commenced since late September, with restocking basically completed for the moment. 

Nickel ore: The nickel ore market was quite robust ahead of the National Day holiday, and downstream NPI and stainless steel plants stocked up on demand. Although the purchasing rhythm has been less affected by the festival factor, the downstream players accelerated their purchases as the main mining areas in the southern Philippines will gradually enter the rainy season in October.

On the supply side, shipment volume and rhythm in the Philippines will drop significantly after the rainy season kicks off. Meanwhile, nickel ore port inventory has been lower than in the same period last year due to poor weather conditions and bearish market sentiment earlier.

On the demand side, NPI prices rebounded with profits improving. Therefore, they restored the willingness to stock up nickel ore, but purchased cautiously as they were conservative toward the NPI and stainless steel market outlook. Therefore, nickel ore prices did not rise significantly recently. Market attention shall be paid to follow-up development and NPI and stainless steel markets for guidance over ore prices on the backdrop of a tight supply-demand balance. 

NPI: Stainless steel mills were quite active in stockpiling NPI this week. Some l mills have basically completed the purchase of raw materials for October, while some were still making inquiries. On the supply side, with the rise in NPI prices this month, the profit situation of NPI plants improved, hence they ramped up the shipments with finished product inventory pressure easing. On the demand side, steel mills' expectations for the future stainless steel market have improved, so the total output of stainless steel in October is likely to increase compared with the previous month. And the mills' demand for NPI has increased with active purchasing.