Spot quotations stood high amid low inventories, downstream demand likely to rebound due to work resumption

SHANGHAI, Mar 2 (SMM)—Nickel futures prices rose significantly last week and then fell to around 140,000 yuan/mt on February 26, and the spot transactions rebounded. Currently, the downstream industries of refined nickel have fully resumed work, and the orders from alloy casting enterprises are relatively stable as they had restocked before CNY and maintained production in holiday. They are waiting to make purchases at low prices. The operating rates of electroplating nickel enterprises were higher on the year, and the transactions of electroplating nickel plates improved significantly, causing the inventories in Guangdong to reduce about 231 mt last week. Although Russian nickel traders started to quote for 2104 contract, the basis remained at the pre-holiday level. Current domestic inventories remained low, while foreign trade companies have relatively fewer long-term orders. The import window is expected to keep open in recent period.

Premiums of Jinchuan nickel dropped markedly as the plants maintained production during CNY holiday and actively shipped out goods at lower prices. Traders were selling nickel briquettes at a high price amid limited tradable spots. In addition, the spot price of nickel sulphate was rising due to the short supply, and nickel briquettes were more traded for the higher cost efficiency.

As of February 26, SMM total inventory of pure nickel in six regions was 27,067 mt, an increase of 257 mt or 0.96% from February 19. It is reported that the 2,000 mt of domestic nickel plates that arrived in Shanghai during CNY have all entered the warehouses. Since SMM has included this part of the inventory in the statistics for the previous week, the domestic inventory increase was relatively low last week. Shanghai imported about 1,000 mt of nickel plates last week, most of which were electroplated nickel from Norway and Japan's Sumitomo, while Russian nickel imports were limited. The customs clearance volume of imported nickel briquettes was about 200 mt, and the inventory in Shanghai stood at 3,500 mt, most of which have been ordered in advance by downstream users, and there were fewer tradable stocks.

Wuxi and Guangdong saw more significant shipment volumes, while Tianjin and Liaoning saw a small increase in inventory due to the stocking by traders. Therefore, SMM's original three regions inventory increased 109 mt to 26,252 mt, and SMM's six region pure nickel inventory increased 257 mt to 27,067 mt.