Spot Market Transactions Turn Cold, Domestic Refined Nickel Premiums Remain Stable at High Levels [SMM Nickel Morning Meeting Summary]

12.30Nickel Morning Meeting Summary

Refined Nickel:

Last week, nickel prices fluctuated, with spot prices ranging from 123,000 to 130,000 yuan/mt and SHFE nickel prices ranging from 122,000 to 129,000 yuan/mt. During the week, nickel prices first rose and then fell, influenced by increased downstream willingness for low-price stockpiling and macroeconomic factors. However, the overall demand from downstream sectors such as stainless steel, batteries, and alloys did not show fundamental improvement, making it difficult to support the upward trend in nickel prices.

Spot Market: From Monday to Wednesday, as nickel prices rose and the previous week's low-price stockpiling by downstream sectors ended, spot market transactions cooled, and premiums for domestic refined nickel remained stable at high levels. Starting Thursday, with significant improvement in the tight supply of domestic Jinchuan-brand refined nickel in the spot market, premiums for domestic refined nickel began to decline rapidly. It is expected that premiums for domestic refined nickel are unlikely to return to high levels before the year-end.

Nickel Sulphate:

Last week, the SMM battery-grade nickel sulphate index price was 26,379 yuan/mt, with battery-grade nickel sulphate quoted between 26,000 and 26,920 yuan/mt, and the average price rose slightly by 10 yuan/mt WoW.

According to the current market situation, the overall fundamental structure has not changed significantly compared to last month. In terms of supply, nickel salt smelters' inventory levels decreased slightly WoW, and spot supply in the circulation market remained relatively tight. Due to losses and the approaching year-end holiday, nickel salt smelters maintained firm quoting sentiment, with coefficients stable at last week's levels.

In terms of demand, this week marked a traditional procurement period for nickel salts, with some precursor plants making inquiries. However, overall market activity remained low. Given the firm pricing stance of nickel salt smelters, most precursor plants continued to adopt a wait-and-see approach.

In the short term, supply and demand are expected to remain weak on both sides, with insufficient driving forces for nickel sulphate prices to move up or down. Nickel sulphate prices are likely to remain stable.

Nickel Pig Iron (NPI):

Last week, the SMM 8-12% high-grade NPI average price was 940.1 yuan/mtu (ex-factory, tax included), down 3.3 yuan/mtu WoW, while the Indonesian NPI FOB index decreased by $0.6/mtu WoW. This week, high-grade NPI prices continued to weaken. Supply side, domestically, as finished product prices continued to decline, smelters faced increased losses, and production remained stable overall. In Indonesia, smelters maintained sufficient raw material stockpiles and, with partial profitability, production saw a slight increase. Demand side, stainless steel spot prices stabilized temporarily, steel mills saw a recovery in orders, and speculative demand increased briefly. Steel mills maintained raw material procurement needs, but with an increased proportion of long-term contracts and spot orders based on average prices, short-term high-grade NPI demand is expected to recover. Supported by costs, prices are likely to remain stable.

Stainless Steel:

Last week, stainless steel spot prices fluctuated downward, with cold-rolled prices continuing to decline slightly compared to the previous week. As of December 27, SMM Wuxi region 304 cold-rolled coil prices were quoted at 12,950-13,200 yuan/mt, and hot-rolled prices were at 12,400-12,500 yuan/mt. This week, market sentiment for stainless steel remained sluggish. Affected by the year-end off-season, downstream purchasing willingness was low, and weak transactions combined with a continuous decline in futures prices failed to support spot prices. Although a certain steel mill in South China aimed for a strong start to the new year with slight production increases, steel mills in East China continued production cuts. Social inventory declined overall during the week, with arrivals slightly decreasing WoW. Cold-rolled inventory mainly consisted of expiring warehouse warrants and year-end destocking of 300-series, while hot-rolled inventory, except for the 400-series, also saw slight reductions. Starting Monday, a certain North China stainless steel mill lowered guidance prices for 300-series resources, with 304 cold-rolled and 321 hot-rolled prices both reduced by 100 yuan/mt. Currently, the market is in a bottoming phase. With in-transit resource volumes remaining low and stable, sales pressure will continue to increase. Stainless steel prices in January are expected to remain low and stable.