Nickel prices have remained strong recently, rising to a high of 148,270 yuan/mt and then falling back, but still above 140,000 yuan/mt.
Why have nickel prices increased recently? Cost support from nickel ores and macro sentiments drive up nickel prices. In fact, entering 2024, fundamentals of refined nickel have exerted a limited impact on nickel prices. SMM believes that nickel prices should be estimated with 60% focus on the macro level, 30% on the industrial chain or the nickel supply and demand structure, and 10% on refined nickel.
On the macro level, affected by multiple factors, the current non-ferrous market outperforms, with copper and aluminum leading the rise. Slow RKAB approval disrupts the expectation of nickel oversupply in the short term. Domestic inventories of refined nickel continue to increase while delivery properties of Russian nickel are undermined by sanctions from the United Kingdom and the United States. In addition, while refined nickel oversupply may occur after new production capacity in 2024H2, the surplus of refined nickel is limited in H1. Therefore, nickel prices have extended gains since February.
As for nickel market outlook, we need to keep an eye on the macro environment and RKAB approval progress.
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