Nickel Price to Move Rangebound in January

SHANGHAI, Jan 11 (SMM) - The absolute spot price of pure nickel was high trailing the futures market in December. But the pure nickel social inventory did not accumulate in the month against the poor market transactions, and dropped nearly 28% instead as a result of spot cargoes flowing to LME warehouses after the export window opened. On the other hand, domestic spot pure nickel supply remained tight with heavy import losses through December.

In January, LME nickel began to fall with influences on the macro and news front. On the supply side, the customs clearance of imported pure nickel picked up after the import losses narrowed accordingly, but the losses expanded to 10,000 yuan/mt soon afterwards. Secondly, China’s pure nickel output rose 11.52% MoM in December with established refined nickel manufacturers rushing to complete their annual target in 2022. Looking ahead, Tsingshan’s new refined nickel project is unlikely to reach full capacity in January 2023. On the demand side, the demand for pure nickel in the alloy sector was strong from late December to early January as downstream players restocked actively in advance to ensure normal production during Chinese New Year before the logistics services halt. To sum up, the import window is unlikely to open in the near term though the SHFE/LME price ratio has been rising. In addition, the supply of deliverable refined nickel is still tight albeit exciting news concerning Tsingshan’s new nickel project. It is expected that nickel price will move rangebound in January.