SHFE Nickel Fell 3.1% on the First Day after National Day Holiday amid Weak Demand and High Inventory

SHANGHAI, Oct 11 (SMM) - SHFE nickel fell after opening on the first day after the National Day holiday. Looking back at the recent trend, since September 21, SHFE nickel continued to fall after hitting the highest point at 202,800 yuan/mt. Only on September 30, SHFE nickel rose. As of the close on October 10, SHFE nickel fell by 3.1%. As of 15:36 yesterday, LME nickel fell by more than 0.81%.

In the spot market yesterday, SMM 1# refined nickel average spot price fell by 3.64% on the day to 183,800 yuan/mt. In the spot market, Jinchuan nickel premiums were quoted at 9,000-9,500 yuan/mt, with an average of 9,250 yuan/mt, up 2,750 yuan/mt from October 9.

NORNICKEL nickel premiums were quoted at 4,000-4,500 yuan/mt yesterday, with an average of 4,250 yuan/mt, up 2,800 yuan/mt from the previous trading day yuan/mt. Although the LME nickel rebounded during the National Day holiday, SHFE nickel opened low in the morning yesterday, and the spot premiums were almost unchanged from September 30, neglecting the price spread between SHFE contracts. Due to the shift of SHFE contract, the spot inventory of traders was low and the supply of spot Jinchuan nickel was tight yesterday. In terms of nickel briquette, the prices of nickel briquette was 180,000-181,100 yuan/mt, down 7,250 yuan from October 9. As the economy effectiveness of nickel briquette weakened, the transaction of nickel briquette was poor.

On the supply side, in terms of NPI, as the prices of NPI rose this month, the profits of NPI plants were better. Therefore, the willingness of shipment increased, and the pressure on the in-plant inventory of finished products eased. From the demand side, stainless steel plants are expected to increase production in October, but the increase in demand may be lower than that in supply. In terms of alloys, the alloy production remained normal during September, and the demand for pure nickel did not decrease significantly. The alloy sector still had rigid demand for pure nickel.

In terms of inventory, both domestically and overseas inventories increased in October. As of October 7, the LME nickel inventory was 52,362 mt, and the total pure nickel social inventory in SMM six regions was 8,194 mt as of October 10. Considering the pre-holiday stocking situation in September, the current downstream enterprises mainly purchased as needed and did not restocked before the holiday. In addition, SHFE nickel is still in a state of decoupling from the fundamentals, and the current demand for pure nickel is still weak. It is expected that current nickel prices cannot gain enough support, and may remain volatile and fall.