SMM Nickel Market Morning Comment (Apr 29)

Nickel prices continued to rise last week, closing at 145,870 yuan/mt last Friday, up 3.52% WoW, which was attributed to slow Indonesian RKAB approval and general price hikes in non-ferrous metals. No new RKAB quotas in the second week after Lebaran enhanced bullish sentiment as bulls were betting on tight nickel raw material supply. However, according to SMM research, Indonesia approved a small amount of nickel ore quotas in the past one and a half months. It did not exert a substantial impact on supply, but suggested the potential to approve more quotas. The delay in entry of nickel intermediate products due to customs inspections last week caused domestic supply tightness in the short term, which affected nickel sulphate production, thus nickel sulphate prices moved up last Thursday. As an important reference indicator for nickel prices in recent days, nickel sulphate price hikes helped nickel prices have more upward room. On the macro level, the US dollar index rose along with gold prices. The price gap between the US dollar and the Japanese yen continued to widen during the last week and the US intends to maintain the dominance of US dollar. However, as frequent geopolitical conflicts in recent years underlined safe-haven properties of the US dollar, funds flowed to new reliable sectors for risk hedging, ultimately to bulk commodities, especially copper and aluminum with strategic attributes. With the future acceleration of RKAB approval, nickel prices may fall back. The most-traded nickel contract is expected to stay between 135,000-145,000 yuan/mt.