SMM Nickel Market Morning Comment Fully (Apr 3)

Overnight, the most-traded SHFE nickel contract opened at 130,850 yuan/mt, and closed at 132,590 yuan/mt, up 990 yuan/mt. Trading volume rose by 27,498 lots to 253,352 lots, and open interest decreased by 5,634 lots to 102,183 lots. The most-traded SHFE nickel contract rebounded after a lower opening. After falling to the intraday low of 130,840 yuan/mt, it closed up 1.96%.

Nickel: On April 2, Jinchuan offered a premium of 2,700-2,900 yuan/mt, with an average price of 2,800 yuan/mt, down 100 yuan/mt compared to the previous trading day. Russian nickel premiums were quoted at -600 to -100 yuan/mt, with an average price of -350 yuan/mt, an increase of 50 yuan/mt from the previous trading day. Nickel on the SHFE showed strong performance in the morning, but spot market transactions were relatively weak due to nickel price fluctuations. In addition, according to SMM research, nickel supply increased this week due to the pace of overseas nickel plate arrivals. The price of nickel beans today is 128,500-129,400 yuan/mt, with an increase of 2,650 yuan/mt from the previous trading day. Nickel sulfate price is 10,823 yuan/mt higher than Nickel beans today.

Nickel Sulfate: On April 2, the SMM battery-grade nickel sulfate index price was 30,648 yuan/mt, down 2 yuan/mt from the previous working day (due to automatic adjustment of weighting). The price of battery-grade nickel sulfate ranged from 30,500 to 31,000 yuan/mt, with an average unchanged from the previous working day. Current transaction activity has weakened slightly, with transactions concentrated around the average price. Currently, downstream acceptance of high-priced nickel sulfate is gradually decreasing, but affected by tight spot supply, saltworks still hold firm on prices. In the tug-of-war between upstream and downstream, nickel sulfate prices remain stable. As the tight supply and demand situation for nickel sulfate gradually eases in April and affected by the limited downward transmission of high-priced precursor enterprises, attention should be paid to the risk of subsequent nickel salt price declines.

Ferronickel: On April 2, the average price of SMM 8-12% NPI was 930 yuan/mtu (including tax), unchanged from the previous working day. From the supply side, although the approval speed of nickel ore quotas has recently increased significantly, it still takes time from the mine to the smelter, so it is expected that ferronickel production during March will still be at a low level. This week is the first trading week of April, combined with the impact of the Qingming Festival holiday in the middle of the week, the upstream and downstream are still in a deadlock, and the market has a cautious sentiment. From the demand side, inquiry in the steel mill market before Qingming Festival is relatively light. Currently, the tug-of-war between upstream and downstream is significant, and transactions are still dominated by buyers' markets. Overall, the weak demand in the stainless steel terminal continues to cause a cumulative trend in the supply side, and the current ferronickel prices remain weak.

Stainless Steel: On April 2, according to SMM research, there was a significant difference in spot stainless steel prices between Wuxi and Foshan. Market quotations remained generally stable, but yesterday's stainless steel futures rebounded significantly after a sharp decline, with strong support at the bottom of the market. After the announcement of the steel mill rebate policy, some Wuxi markets slightly raised prices for 304 hot-rolled and some low-priced cold-rolled resources to maintain profits. Mainstream prices in Foshan are still based on a base price of 13,000 yuan/mt, but there is considerable room for negotiation, and some private cold-rolled resources are sold at discounted prices. Market transaction prices continue to decline, and steel mills have reduced production slightly in April. Downstream demand for stainless steel has not improved, and spot prices are expected to continue to be weak. In the morning of the same day, the price of 304 cold-rolled stainless steel in Wuxi was 13,300-13,700 yuan/mt, 304 hot-rolled stainless steel in Wuxi was 12,800-12,900 yuan/mt, 316L cold-rolled stainless steel in Wuxi was 24,000-24,300 yuan/mt, and 201J1 cold-rolled stainless steel in Wuxi was 8,700-8,800 yuan/mt. 430 cold-rolled stainless steel in Wuxi was 8,100-8,200 yuan/mt. At 10:30, the SHFE SS2405 contract price was 13,430 yuan/mt, with a premium of 40-440 yuan/mt for stainless steel spot prices in Wuxi (cut-off = raw edge + 170 yuan/mt).