Low SHFE Nickel Warrants Arouse Wild Fluctuations in Prices, and the Spot Prices Fall

SHANGHAI, Feb 21 (SMM) - Affected by the low SHFE nickel warrants, nickel prices fluctuated greatly. The most-traded SHFE nickel contract soared by more than 4% after opening. As of 10: 02 a. m., the prices surged by 3.86%. LME nickel prices ballooned 4.88% yesterday.
Spot: On February 21, the average price of SMM #1 refined nickel soared by 3.06% or 6,400 yuan/mt from the previous trading day to 215,450 yuan/mt. On February 20, the prices of nickel briquettes were 204,500-205,600 yuan/mt, down 4,000 yuan/mt from the previous trading day. Nickel briquette trading was poor as the prices were still higher than the nickel sulphate prices.
Fundamentals:

Supply: Upstream enterprises were much more willing to ship despite the expected sufficient nickel supply, dragging down spot premiums yesterday. On February 20, the average price of SMM Ni 8-12% high-grade NPI was 1,350 yuan/mtu (ex-factory, tax included), flat from the previous trading day. Some large stainless steel mills have set the NPI prices for March in the form of fixed orders. The sellers’ quotes remained almost unchanged yesterday, but the purchase prices offered by stainless steel mills fell slightly.
Demand: According to SMM research, the news that stainless steel mills controlled the goods allocation last week boosted market confidence, and the #304 stainless steel trading was acceptable. However, processing plants purchased cautiously amid poor orders. Most alloy companies have basically completed restocking, hence these enterprises made fewer inquiries yesterday.

To sum up, affected by the low SHFE nickel warrants, the nickel prices will fluctuate sharply, but the demand remains weak, which will offer insufficient upward momentum to the short-term nickel prices.