Nickel Prices to Run with Occasional Declines on Expanding Supply This Week

SHANGHAI, May 15 (SMM) - On the evening of May 10, the seasonally adjusted US CPI annual rate for April recorded 4.9%, lower than the forecast and previous readings of 5%. The market thus generally expected the monetary policy to be hawkish to quell the stubborn inflation. On May 11, the US Department of Labor announced that the initial jobless claims for the previous week were 264,000, higher than the expected 245,000 and the previous figure. Under the long-term rate hike cycle, although inflation has cooled down, its negative impact on the job market remained large, further suppressing consumption and increasing the risk of an economic recession as well as weighing on the nonferrous metals prices. In terms of fundamentals, SMM research suggested that some imported pure nickel would flow into the Chinese market in May without staying temporarily in the bonded zone warehouses because these spots under long-term contracts were priced based on a mixed pricing model. In addition, the electrowinning nickel output is expected to grow in the second quarter of 2023. The pure nickel demand picked up significantly thanks to the dropping futures and spot prices. Some nickel salt plants still bought nickel briquettes though the prices were still higher than nickel sulphate prices. On the other hand, stainless steel mills restocked nickel briquettes on falling nickel prices as the 300-series stainless steel output is expected to increase in May. In general, the demand has picked up amid the sharp decline in futures prices, and the supply may grow, thus SMM believes that the nickel prices will move with occasional declines.