SHANGHAI, Jan 9 (SMM) – According to SMM data, domestic nickel stocks have been on the decline since December 9, 2022. Nickel prices plummeted since the start of 2023, and this significantly improved the transaction of pure nickel. At the same time, some downstream manufacturers restocked for production during Chinese New Year holidays, continuing to reduce nickel inventories. Nickel stocks decreased for two consecutive weeks by over 1,300 mt.
As of January 6, the stocks of pure nickel in the six places surveyed by SMM dropped to 4,084 mt, the lowest since July 22, 2022, 955 mt lower than a week earlier. Nickel briquette inventory across the six regions stood at 520 mt, down 220 mt from a week earlier. Nickel plate inventories decreased 735 mt to 3,564 mt.
The prices of SHFE nickel saw big volatility between January 2-6, surging to 234,870 yuan/mt on January 4, the highest since April 25, 2022. Prices then extended losses with a weekly decline of 8.28%. The SMM average spot price of #1 refined nickel fell by 9% within two days last week, and the transaction of pure nickel in the spot market improved significantly. Thus the domestic inventories of both nickel briquette and nickel plate decreased.
LME nickel stocks also decreased last week, with a weekly decline of 650 mt, dipping to 54,822 mt. LME nickel inventories fell for four weeks on end. Import losses of NORNICKEL nickel shrank to around 2,000 yuan/mt, prompting some traders to clear customs. Possible declines in LME nickel prices may narrow import losses further. There would be accumulation of cargoes in the bonded zone awaiting customs clearance. Overseas visible pure nickel inventories are likely to fall further.
In terms of refined nickel imports, the import loss continued to narrow last week on the back of the recent decline in LME nickel prices. As of January 6, the loss stood at 1,800 yuan/mt, 29,500 yuan/mt lower than in December 2022.
In summary, the impact of the news on the nickel market is gradually weakening, and the policy of the Fed to fight inflation will be an important factor affecting nickel prices in the short term, which compounded uncertainties of nickel inventory changes. As the CNY holidays near, traders and producers would gradually halt their operations. Some downstream companies have completed stockpiling. SMM predicts that the speed of domestic pure nickel destocking may slow down in the near future.
