Nickel Prices are Expected to Keep Pulling Back this Week after Extreme Price Moves

SHANGHAI, Mar 21 (SMM) - Last week, the COVID-19 outbreak affected transportation and transaction in the spot market. Due to the uncertainty of SHFE nickel after the re-opening of LME nickel trading and high nickel prices, the spot transaction was few. The nickel-hydrogen battery plants did not make any purchase despite the low stocks, and nickel sulphate and precursor plants are expected to reduce the production. The shortage of nickel caused the tight supply of nickel sulphate. If the output of high-grade nickel matte can increase substantially, the tight supply of new energy products and nickel briquette will be alleviated. However, the production of high-grade nickel matte could not meet expectations last week. SHFE and LME both released a series of bearish policies, which will help nickel prices to return to the fundamentals. In this case, the most traded SHFE nickel contract is expected to keep pulling back this week. SHFE nickel prices are expected to fluctuate between 190,000-220,000 yuan/mt this week, and LME nickel prices are expected to move between $35,000-50,000/mt.