SMM Nickel Market Morning Comment Fully (Mar 22)

Overnight, the most-traded SHFE nickel contract opened at 136,360 yuan/mt, and closed at 137,980 yuan/mt, down 1,420 yuan/mt. Trading volume fell by 11,347 lots, and open interest decreased by 1,885 lots. From a macro perspective, the Fed announced yesterday evening that the March interest rate range will remain unchanged. 10 Fed officials expected the interest rate to fall by at least 75 basis points by the end of this year. However, Powell said that the possibility of a rate cut in May is still small. Fundamentally, the progress of nickel ore approval accelerated. The market's expectations for tight supply of raw materials began to weaken, so the prices fell sharply in the afternoon. In addition, according to SMM research, the tight output of intermediate products is expected to ease in April. Nickel price is expected to go down.

Nickel: On March 21st, Jinchuan reported a premium of 1,500-1,700 yuan/mt, with an average price of 1,600 yuan/mt, which remained unchanged compared to the previous trading day. Russian nickel was quoted at a discount of -600 to -100 yuan/mt, with an average price of -350 yuan/mt, a decrease of 50 yuan/mt compared to the previous trading day. SHFE nickel fluctuated slightly higher in the morning compared to yesterday. The trading atmosphere in the spot market improved today, with downstream purchasing intentions beginning to recover due to their own raw material inventory. In addition, according to SMM research, some overseas refined nickel arrivals are expected this week, indicating an increase in supply during the week. Today, the price of nickel beans is 133,550-134,450 yuan/mt, an increase of 550-2650 yuan/mt compared to the previous trading day. The price difference between nickel beans and nickel sulfate is approximately 5,318 yuan/mt (nickel sulfate prices are 5,318 yuan/mt higher than nickel beans prices).

Nickel sulfate: On March 21st, the SMM battery-grade nickel sulfate index price was 30,547 yuan/mt, an increase of 193 yuan/mt compared to the previous working day. The price of battery-grade nickel sulfate is 30,300-31,000 yuan/mt, with an average price increase of 150 yuan/mt compared to the previous working day.Inquiry activity remains high this week, and downstream gradually begins to prepare for April raw materials. However, affected by the upward trend in raw material prices, the profit of nickel sulfate finished products has been restored. It is expected that the cost side will weaken the driving force for the upward trend of nickel sulfate prices in the future.

NPI: On March 21st, the average price of SMM 8-12% high-NPI was 947 yuan/ mtu (ex-factory including tax), a decrease of 1 yuan/nickel point compared to the previous working day. From the supply side, although the number of nickel ore quota approvals is continuously increasing, it still takes time from the mine to the smelter, so the current operating rate of NPI production is still low. Although the price of ferrochrome has risen, the mentality of NPI traders to sell cautiously has weakened, and some traders have actively lowered their quotations recently, with an increased attitude towards shipping. From the demand side, influenced by the rise in raw material prices, the stainless steel market has rebounded. However, from the perspective of the spot market, the increase in market prices has not yet driven up spot prices. The main reason is that terminal demand continues to be weak. Overall, the supply and demand of the NPI industry chain is still weak at the moment, and it is expected that the price of NPI will remain weak in the short term.

Stainless steel: On March 21st, the SS contract 2405 contract opened at 13,665 yuan/mt and closed at 13,675 yuan/mt, a decrease of 15 yuan/mt compared to the closing price of the previous trading day. The SS contract maintained a downward trend in the morning and bottomed out in the afternoon to cover positions. Today's trading volume was 228,400 lots, an increase of 36,624 lots compared to the previous trading day, and the open interest was 162,552 lots, an increase of 7,388 lots compared to the previous trading day. The total trading volume of the top five institutions was 259,056 lots, an increase of 37,560 lots. The total long position of the top five institutions was 38,599 lots, a decrease of 1,111 lots. The total short position of the top five institutions was 60,165 lots, an increase of 2,391 lots. Under this combination, both long and short positions have increased, but the short side has significantly increased its positions. Due to the release of price restrictions in Qingshan's spot market, the price has once again fallen, and the short side has a greater grasp of the subsequent decline.After the short-term downward trend ended in the afternoon, the price fell too much, and the long side passively increased positions at the low level. Some shorts took profits and left the market, leading to a certain rebound in the afternoon. The social inventory of stainless steel this week shows a trend of accumulation, and there is considerable pressure from warehouse receipts. Although the price has fallen below the cost line, it is difficult to rise. It is expected that the SS contract will continue to oscillate weakly in the short term.