SHANGHAI, February 5 (SMM) –
SHFE nickel prices fluctuated downward last week, experiencing a five-day consecutive decline. Initially, positive macro sentiments was gradually absorbed by the market. The approval process for Indonesia's RKAB slowed, but there's a slight uptick compared to last week's data. This provided some relief to the short-term tightness in nickel ore supply. On the macro front, a significant event last week was the first interest rate decision of the Federal Reserve in 2024, which resulted in maintaining the rates at 5.25%-5.50%. This outcome aligns with market expectations, making it the fourth meeting in a row where interest rates haven't changed since September last year. Federal Reserve Chairman Powell stated that he doesn't believe the first interest rate cut will happen in March. This dampened market optimism for a rate cut in the first half of the year, leading to a decline in market trading sentiment, which affected the overall performance of the nonferrous metals sector. Following February 2, the latest macro data in the United States revealed an increase of 9,000 in initial jobless claims for the week ending January 27, reaching a total of 224,000. The released unemployment data after the Federal Reserve meeting indicates a sluggish job market, reigniting investors' confidence in the expectation of interest rate cuts by the Federal Reserve later in the year. In terms of fundamentals, approaching the Chinese New Year holiday, there was a slight decrease in transaction frequency between upstream and downstream enterprises since mid-January. However, the overall spot market still maintained an active trading atmosphere. Additionally, it's noteworthy that some upstream refined nickel plants reported that a portion of last week's orders are for post-holiday. In terms of inventory, both domestic and overseas inventories continued to accumulate last week. Domestic inventories exceeded 20,000 mt, while overseas inventories surpassed 70,000 mt. Looking at the supply side, according to SMM research, refined nickel production in January increased compared to the previous month. The main reason for this is the rebound in nickel prices in January compared to last December, allowing most refined nickel plants to operate profitably. From the demand perspective, as the Spring Festival holiday approaches, downstream enterprises are gradually entering holiday mode, resulting in a slowdown in procurement pace and a slight decrease in overall spot market activity. In addition, according to SMM research, downstream post-holiday procurement is expected to take place in late February. In summary, the current SHFE nickel market shows a mix of bullish and bearish sentiments, with a certain degree of strength observed before the holiday.
SHFE nickel prices fluctuated downward last week, experiencing a five-day consecutive decline. Initially, positive macro sentiments was gradually absorbed by the market. The approval process for Indonesia's RKAB slowed, but there's a slight uptick compared to last week's data. This provided some relief to the short-term tightness in nickel ore supply. On the macro front, a significant event last week was the first interest rate decision of the Federal Reserve in 2024, which resulted in maintaining the rates at 5.25%-5.50%. This outcome aligns with market expectations, making it the fourth meeting in a row where interest rates haven't changed since September last year. Federal Reserve Chairman Powell stated that he doesn't believe the first interest rate cut will happen in March. This dampened market optimism for a rate cut in the first half of the year, leading to a decline in market trading sentiment, which affected the overall performance of the nonferrous metals sector. Following February 2, the latest macro data in the United States revealed an increase of 9,000 in initial jobless claims for the week ending January 27, reaching a total of 224,000. The released unemployment data after the Federal Reserve meeting indicates a sluggish job market, reigniting investors' confidence in the expectation of interest rate cuts by the Federal Reserve later in the year. In terms of fundamentals, approaching the Chinese New Year holiday, there was a slight decrease in transaction frequency between upstream and downstream enterprises since mid-January. However, the overall spot market still maintained an active trading atmosphere. Additionally, it's noteworthy that some upstream refined nickel plants reported that a portion of last week's orders are for post-holiday. In terms of inventory, both domestic and overseas inventories continued to accumulate last week. Domestic inventories exceeded 20,000 mt, while overseas inventories surpassed 70,000 mt. Looking at the supply side, according to SMM research, refined nickel production in January increased compared to the previous month. The main reason for this is the rebound in nickel prices in January compared to last December, allowing most refined nickel plants to operate profitably. From the demand perspective, as the Spring Festival holiday approaches, downstream enterprises are gradually entering holiday mode, resulting in a slowdown in procurement pace and a slight decrease in overall spot market activity. In addition, according to SMM research, downstream post-holiday procurement is expected to take place in late February. In summary, the current SHFE nickel market shows a mix of bullish and bearish sentiments, with a certain degree of strength observed before the holiday.
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