Domestic Refined Nickel Supply Was Sufficient During the Week, Premiums and Discounts Declined This Week [SMM Analysis]

Domestic Refined Nickel Supply Sufficient During the Week, Spot Premiums Declined This Week

Nickel prices showed a fluctuating trend this week, with spot prices ranging between 122,200-130,000 yuan/mt and SHFE nickel futures prices fluctuating between 122,270-125,650 yuan/mt. Overall, nickel prices declined this week.

In terms of supply, as of the end of December 2024, national refined nickel production increased by 2.2% MoM and was up 27.6% YoY. The industry's monthly operating rate stood at 73%, basically flat compared to the previous month, with a slight increase mainly driven by production growth from top-tier enterprises. On the demand side, enterprises engaged in year-end stockpiling during the first half of the week, leading to relatively active market transactions. However, after entering January, as stockpiling was completed, market demand turned mediocre.

Regarding spot premiums, domestic refined nickel premiums rose slightly on Friday but continued to decline overall this week. The spot market in January is expected to remain sluggish, with no significant reduction in supply. Against the backdrop of loose supply and demand, nickel prices are expected to continue fluctuating downward in the short term. The spot nickel price range for next week is forecasted at 121,500-125,350 yuan/mt, while futures prices are expected to range between 121,570-124,950 yuan/mt.

Bonded Zone Inventory Unchanged During the Week

According to the latest survey data from SMM, nickel inventory in the bonded zone remained at 4,900 mt this week, unchanged WoW.

Social Inventory Slightly Destocked This Week 
During the week, SMM's six-location inventory totaled 40,219 mt, with a destocking of 950 mt WoW. Nickel prices mainly trended downward during the week, coupled with a loosening of domestic spot premiums. Additionally, downstream stocking demand ahead of the Chinese New Year strengthened overall purchase willingness, leading to a slight decrease in inventory.