Pure Nickel Supply will be Relatively Tight in October, thus Keeping the Spot Prices Rangebound

SHANGHAI, Oct 18 (SMM) - Spot pure nickel prices were high with support from rising SHFE nickel price in September, while the market transactions picked up as well compared with August. Specifically, the demand for pure nickel in the nickel-metal hydride battery industry has been contracting since the extreme LME nickel price moves on the back of high nickel prices. The sharp rise in nickel prices in September led to a further decline in orders in the nickel-metal hydride battery sector. However, it is worth noting that due to factors such as extensive applications and strong rigid demand, the demand for pure nickel in the nickel-based alloy sector has been resilient, with a total pure nickel consumption of 4,546 mt in September, up 7.32% MoM. Secondly, the 23% MoM increase in the production of 300-series stainless steel in September also boosted the demand for pure nickel. Thus the overall demand and transactions of pure nickel were both satisfying.

SHFE nickel extended the trend in late September and moved rangebound entering October. But the price has been well supported with rare growth on the supply side as well as traditional seasonal high in September and October. On the supply side, although the resumption of refined nickel production by salt plants progressed as expected, the market popularity may fall short in the short term as it is new to the market. In addition, the relating output growth will be limited, which is unlikely to significantly improve pure nickel supply. On the demand side, nickel sulphate is still expected to increase in terms of production in October. Although nickel sulphate manufacturers barely use nickel briquette, the nickel briquette inventories will fall thanks to the rigid demand. In October, nickel-based alloys and stainless steel are both expected to post production increment, with the output of nickel-based alloys and 300-series stainless steel likely to add 0.65% and 12.58% MoM respectively. To sum up, pure nickel supply will be relatively tight in October, thus keeping the spot prices rangebound