[Ni Price] SMM Nickel Market Daily Review (2015-8-3)

SHANGHAI, Aug. 4 (SMM) – SMM #1 nickel prices were between RMB 80,800-82,100/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 500/mt in the morning. Jinchuan Group lowered ex-works prices in the morning as nickel prices fell. Traders built stocks at lows, while downstream buyers took a wait-and-see posture, with traded prices between RMB 80,900-81,700/mt. Nickel futures prices slumped in the afternoon, muting trading. Russian nickel prices dropped below RMB 80,000/mt, allowing market pessimism to prevail in the market. Downstream buying interest was also weak, with traded prices between RMB 80,000-80,900/mt. Jinchuan lowered ex-works price by RMB 1,300/mt to RMB 81,500/mt.

SMM surveyed 30 market players to find that no one is bullish toward price trends, 20 are neutral, and 10 are bearish.

The 53% think LME nickel prices will fluctuate between USD 10,700-11,050/mt. China’s PMI in July continued to fall, reflecting downward pressure for Chinese economy. US economic indicators fell a touch short of market expectations but proved better. This fueled market expectations of a nearing interest rate hike by the Fed. China’s stainless steel market will unlikely turn around in the near term. But a falling SHFE/LME nickel price ration from slumping LME nickel prices will constrain nickel imports. Besides, Philippine suppliers will hold nickel ore prices firm, giving support to nickel prices. SHFE 1509 nickel contract prices will stabilize around RMB 80,000/mt.

The 47% bearish ones believe LME nickel prices will move between USD 10,450-10,750/mt. US non-farm employment data slated for release this week are promising, which will bolster the US dollar. China’s July PMI hit a record low, boding ill for Chinese economy. This triggered concerns over China’s demand for nickel. SHFE 1509 nickel contract prices will fall toward RMB 75,230/mt.