Jinchuan Nickel Premiums Accelerate Decline; Some Stainless Steel Merchants May Slightly Restock to Get Ahead [SMM Nickel Morning Meeting Summary]

1.17Nickel Morning Meeting Summary

Refined Nickel:

Spot Premiums/Discounts: Today, the mainstream spot premium quotation range for Jinchuan No.1 nickel is 2,000-2,400 yuan/mt, with an average premium of 2,200 yuan/mt, down 500 yuan from yesterday. The quotation range for Russian nickel premiums/discounts is -300 to 0 yuan/mt, with an average premium/discount of -150 yuan/mt, unchanged from yesterday.

Futures Market: In the morning, nickel prices fell by 40 yuan to 127,480 yuan, a decrease of 0.03%.

Today, futures prices fluctuated downward but remained at high levels. In terms of market transactions, as the year-end approaches, downstream enterprises are expected to start their holidays next week, leading to weak purchase willingness. Consequently, amid sluggish market transactions, Jinchuan nickel premiums accelerated their decline today, with the average premium dropping to 2,300 yuan/mt. Supply side, producers maintained high operating rates, ensuring ample supply. Under the surplus in supply and demand, Jinchuan nickel premiums are expected to decline further in the short term. Nickel prices are also expected to maintain a fluctuating trend.

Price Spread With Nickel Sulphate: Today, nickel briquette prices were 126,900-127,250 yuan/mt, down 125 yuan/mt from the previous trading day's spot prices. Nickel sulphate remains at a discount to refined nickel.

Nickel Sulphate:

On January 16, the SMM battery-grade nickel sulphate index price was 26,506 yuan/mt, with a quotation range of 26,250-26,970 yuan/mt, and the average price increased compared to yesterday.

In terms of costs, LME nickel prices remained stable today. Currently, profits from producing nickel sulphate using high-grade nickel matte and intermediate products have turned negative. On the demand side, most precursor plants have completed their January nickel salt restocking, with only a small portion still requiring restocking. Market inquiry activity remains weak. On the supply side, nickel salt plants are facing critically low finished product inventories, leading to tight supply. Overall, under the pattern of tight supply and rising costs, prices still have room for further increases.

Nickel Pig Iron (NPI):

On January 16, the SMM 8-12% high-grade NPI average price was 938 yuan/mtu (ex-factory, tax included), up 2.5 yuan/mtu from the previous working day. Supply side, domestically, high-grade NPI prices fluctuated downward, and domestic smelters showed weak production motivation, with production expected to decline. In Indonesia, with the release of some new capacity and additional output from high-grade nickel matte switching to NPI production, high-grade NPI production is expected to increase slightly. Demand side, current stainless steel prices have stabilized and rebounded, and steel mill profits have partially recovered. The expected reduction in production this month is likely to be less than previously anticipated in the production schedule. The economic advantage of high-grade NPI over stainless steel scrap has expanded, leading to an increased usage ratio compared to last month. Currently, circulating resources in the market are tightening due to an increased proportion of long-term contracts with steel mills. In the short term, high-grade NPI prices may stabilize and rebound.

Stainless Steel:

On January 16, after rising and pulling back in the overnight electronic trading session, prices remained stable today, with spot prices continuing to hold steady. As the Chinese New Year approaches, market transactions are sluggish, and sentiment is relatively low. The destocking pace of traders and public warehouses is not significant, with some merchants slightly restocking to get ahead. 304 cold-rolled prices in Wuxi were quoted at 12,900-13,200 yuan/mt, 304 HRC at 12,400-12,600 yuan/mt, 316L cold-rolled at 23,600-23,800 yuan/mt, 201J1 cold-rolled at 7,600-7,750 yuan/mt, and 430 cold-rolled at 7,150-7,450 yuan/mt. At 10:30 a.m., the SHFE SS2503 contract price was 13,220 yuan/mt, and Wuxi stainless steel spot premiums were -150-150 yuan/mt (spot trimmed edge = mill edge + 170 yuan/mt).