【Minutes of the Nickel Morning Meeting on February 19】
Pre-holiday nickel prices fluctuated downward. The decline in nickel prices is mainly due to the gradual digestion of previous macroeconomic bullish sentiment. Although the approval of Indonesian nickel ore RKAB has been slow, it has increased compared to data from the previous week. In the short term, the tense situation of nickel ore supply has eased to some extent, coupled with hawkish remarks from the Federal Reserve after the meeting, leading to a slight decline in market sentiment. From a fundamental perspective, despite the increase in nickel production in January, the trend of global nickel inventories continues to accumulate, with LME inventories surpassing 70,000 tons, mainly from warehouses in Asia. Looking at the downstream demand side, most downstream users completed inventory buildup in January, and some even booked February's inventory in advance. Therefore, the spot market transactions may be flat in the early period after the New Year, and some downstream users will gradually resume purchases at the end of February. Overall, it is expected that nickel prices will fluctuate weakly after the New Year.
Pure Nickel: With the increase in pure nickel production in January, the trend of global pure nickel inventory accumulation remains unchanged. LME inventories have exceeded 70,000 tons, with the main increase coming from warehouses in Asia. Looking at the downstream demand side, most downstream users completed inventory buildup in January, and some even booked February's inventory in advance. Therefore, spot market transactions may be flat in the early period after the New Year, and some downstream users will gradually resume purchases at the end of February. Overall, it is expected that nickel prices will fluctuate weakly after the New Year.
Ferro-Nickel: As of the pre-holiday period, the average price of SMM 8-12% high-nickel pig iron was 932.5 yuan/nickel point (factory inclusive of tax), an increase of 1.25 yuan/nickel point from the previous week. The price of ferro-nickel rebounded slightly during the week. From a fundamental perspective, on the supply side, some iron factories entered the shutdown phase due to the Spring Festival holiday, and it is expected that China's high-nickel pig iron production will further decrease in February. On the demand side, most steel mills have completed pre-holiday inventory buildup, and some steel mills have no demand for inventory buildup before the holiday, so they are expected to replenish inventory after the holiday. Currently, RKAB approval is blocked, Indonesian nickel ferroalloy factories have proactively reduced operating rates, and there are expectations of production cuts in the future.
Nickel Sulfate: On February 6, the SMM battery-grade nickel sulfate index price was 26,963 yuan/ton, up 340 yuan/ton from the previous Thursday. The price of battery-grade nickel sulfate was 26,800-27,600 yuan/ton, with an average increase of 300 yuan/ton from the previous Thursday. The price of nickel sulfate continued to rise slightly this week. Starting this week, most transactions in the nickel sulfate market were based on SMM's slightly flat to average flat water pricing. Currently, there is limited spot supply available for sale, and downstream ternary precursor companies still have demand for nickel sulfate during the Spring Festival period. Therefore, at the point where spot supply is scarce in the market, the price of nickel sulfate rose again. On the cost side, the current market MHP spot supply is not abundant. This week, MHP prices remained at 76-78, with transaction prices maintained at around 76-77, and cost support still exists. Looking ahead, with the arrival of the Spring Festival, procurement activities have stopped, but it is expected that downstream companies will start to replenish raw materials for March orders after the holiday. With the low operating rate of salt factories in February, the tight supply and demand situation is unlikely to significantly ease, so it is expected that the price of nickel sulfate will continue to be strong after the holiday.
Stainless Steel: In the pre-holiday week, the spot price of stainless steel remained stable. On February 6, the SMM 304 cold-rolled margin quotation was 13,900-14,200 yuan/ton. The SS contract fluctuated downward, breaking through 13,600 yuan/ton, showing a weak trend, but currently, stainless steel spot traders have entered the holiday, spot transactions have been postponed, and there are basically no spot quotations in the market. In terms of arrivals, large public warehouses are still receiving goods during the Spring Festival period, but affected by the reduced number of land transportation vehicles during the Spring Festival and road blockages due to ice and snow in the East China region, the arrival volume this week is weak. There were basically no transactions in the stainless steel spot market this week. The stainless steel market entered the holiday, and it is expected that the spot prices of stainless steel will remain at the current level after the holiday.
