New stories on the supply side keep on rising prices of nickel, cobalt and rare earths

SMM News: August 8, Shanghai nickel multiple contract limit led the commodity market, London nickel futures harvest the biggest one-day increase in 10 years. Cobalt is also in the midst of a spree of rising prices. The cobalt sheet of Wuxi stainless Steel Electronic Trading Center (content ≥ 99.8%) was quoted at 22.50 to 235000 yuan / ton on the 8th, up 8000 yuan / ton from the previous trading day. In addition, the price of rare earths, which has been silent for a while, has also picked up again. In an interview with the Shanghai Stock Exchange, people in the non-ferrous industry said that the biggest factor behind the price increase of these varieties is the continuous emergence of new stories on the supply side.

Market participants believe that the sharp rise in nickel varieties on the 8th is mainly due to rumors of a ban on mining in Indonesia, there are rumors that Indonesia may ban nickel mine exports in advance. Fan Runze, an analyst at Yongan Futures, said that from a fundamental point of view, nickel futures trading contains many factors. Indonesia's raw ore export quota policy does have a tightening trend, but it is not clear whether it will ban mining ahead of time. From the point of view of demand, stainless steel production continued to increase in August, and the demand for nickel is still strong. Judging from the second quarterly reports of major overseas companies, pure nickel production continues to decline. There will be almost no increase in overseas pure nickel this year, and the structural shortage of pure nickel will be even more obvious.

Xingsheng futures analyst Yu Dengniu believes that Indonesia has said that it does not care about export ban rumors, supply expectations have not changed much, but nickel prices are still rising rapidly under the main game against fundamentals. The external market has a significant impact on the internal market, the larger increase in nickel directly led to the opening of Shanghai nickel early trading on the 8th.

The nickel-cobalt research team of the Cobalt Industry Branch of the China Nonferrous Metals Industry Association believes that China is the most important primary nickel consumer. The factors that affect the price of nickel are not only the fundamentals, but also the impact of the international situation can not be ignored.

Compared with many specious factors behind the rise in nickel prices, the news that triggered this round of cobalt price recovery has been confirmed. Commodities giant Glencore confirmed on the 7th that it plans to close the large copper and cobalt mine Mutanda, for temporary maintenance by the end of the year, and said it will restart after the economic situation has improved enough. In 2018, Mutanda produced 27300 tons of cobalt, more than half of Glencore's total production and 21 per cent of global production, according to data. It had been predicted that the global cobalt supply glut would reach 35000 tons in 2020. If Mutanda stops production, it is expected to greatly improve the relationship between supply and demand and contribute to the recovery of cobalt prices, which are already hovering around the cost line.

Rare earths dominated the market in the first half of the year, followed by a continuous correction in prices. Since August, the rare earth market has improved again. At present, the prices of praseodymium neodymium oxide and neodymium oxide in light rare earths have risen to about 310000 yuan per ton. In heavy rare earths, dysprosium oxide is quoted at 1.95 million yuan / ton, close to the previous high level. The quotation for terbium oxide reached about 4 million yuan per ton. Rare earth industry chain independent analyst on the stock reporter revealed that the recent industry authorities in charge of the organization of rare earth large groups to discuss commercial storage matters. At present, the quotation of large factories is strong, and business confidence is generally sufficient. The Guojin Securities report said that due to the impact of the Myanmar mine ban on imports, the shortage of medium and heavy rare earths and the decline in dysprosium and terbium production have some support for future prices.