SHANGHAI, Apr 19 (SMM) - In March, nickel prices continued to fall in light of the pricing method change of Nornickel, intensified overseas banking crisis, and the Fed raising interest rate hike by 25bp. But in its post-meeting document, the Fed proposed that some additional policy tightening may be appropriate and the market thus expected that the interest rate hike may end. That is why nickel prices rebounded afterwards. On March 27, the LME nickel trading during Asian hours was resumed as LME also announced to expand the scope of deliverables, which once again weighed on nickel prices.
Entering April, the poor March ADP employment data and the number of people claiming unemployment benefits released on April 5 and 6 indicated a weak US job market. However, on April 7, the non-farm payrolls exceeded market expectations, which showed that the current US labour was still strong. As such, more market players believed the Feb will raise interest rates by 25 basis points in May, which put pressure on non-ferrous metal prices. In 2023, electrowinning nickel companies begin to produce finished products with nickel sulphate, and the NPI market is in a supply surplus, which affects the factors contributing to nickel price change. The break-even point of nickel sulphate produced with nickel briquettes supports the nickel prices, while the profit margin of electrowinning nickel produced with nickel sulphate puts a certain pressure on the prices. Nickel sulphate demand from the new energy sector may not be promising until mid-2023, which may weigh on the prices. Profit margins of electrowinning nickel will bounce back on stable refined nickel prices or bullish macro and fundamental factors, which will boost the electrowinning nickel production. In the long run, the electrowinning nickel output is expected to grow, and the nickel prices will fall further.
