SMM nickel market morning comment (Apr 1)

Nickel prices are affected by cost-related news, fluctuating around 130,000 yuan/mt. Before last Thursday's U.S. stock market opening, the latest report from the U.S. Bureau of Economic Analysis increased the GDP growth rate for the fourth quarter of 2023 and lowered key inflation indicators. However, Federal Reserve Board Governor Waller, on last Wednesday, suggested no urgency for rate cuts, signaling a potential delay in rate cuts. U.S. dollar index futures rose. Fundamentally, the pure nickel spot market stayed strong. Downstream buyers utilized their stockpiled materials because of high nickel prices. SMM predicted these inventories would be depleted by late March. With nickel prices dropping, buyers are eager, and this trend is likely to continue until early April. Supply side, overseas nickel plate long-term orders arrived for the first time this year, and local nickel plants are ramping up production. However, the price gap between nickel sulphate and nickel briquettes widened, reaching around 10,000 yuan/mt. This has made producing nickel sulphate profitable by dissolving nickel briquettes with sulfuric acid. With a shortage of intermediate products like MHP, some nickel sulphate plants started buying nickel briquettes. Due to limited domestic nickel briquettes stock and the ongoing closure of pure nickel import window, it's hard for overseas nickel briquettes to enter the domestic market. Currently, the domestic supply and demand for nickel briquettes are extremely tight. However, as overseas intermediate products arrive, the demand for nickel briquettes will decrease.