SMM Nickel Market Morning Comment (Apr 8)

SHFE nickel performed well last week. Since March 28, the nickel price has risen for five consecutive days. As of April 3, it grew to 133,450 yuan/mt. Recently, the nickel ore quota is still the center of attention. The nickel ore approval in Indonesia is slower than expected, leading to no new quota in the past two weeks. Indonesian HPM rose by about $3/wmt in April. On this basis, the local nickel ore premium remained high, with the overall tight supply. As the United States, Japan and the Philippines are estimated to start nickel supply cooperation after the meeting on April 11, the market now has begun to worry about its impact on China’s import price of Philippine ore, and whether it could impact the production of domestic smelters. Currently, the market has speculated on whether the Fed will cut interest rates in June. Aditya Bhave’s analyst team at Bank of America released a research report on Tuesday local time, pointing out that considering the base effect of year-on-year core PCE inflation, the best time to cut interest rates this year may be in the first half. Fundamentally, the nickel plate supply continues to increase. Although imports under long-term orders have decreased compared with last year, imported nickel plates still lead to ample supply. In summary, the nickel price is mainly influenced by the industrial chain and macro environment in the short run, rather than refined nickel market fundamentals.