Refined Nickel Transactions Were Sluggish During the Week, Premiums and Discounts Declined This Week [SMM Analysis]

Refined Nickel Transactions Sluggish During the Week, Spot Premiums/Discounts Declined This Week

Nickel prices showed a fluctuating trend this week, with spot prices ranging between 122,800-128,900 yuan/mt, while SHFE nickel futures prices fluctuated between 120,400-125,300 yuan/mt.

In terms of market transactions, the market remained sluggish this week. Supply side maintained a high operating rate with no significant production cuts observed. On the demand side, as most transactions were completed before New Year's Day, recent additional demand was limited. With the Chinese New Year approaching, market transactions are expected to remain weak next week. Supply side, according to SMM, China's refined nickel production in January 2025 is expected to decrease by 0.3% MoM but increase by 27.68% YoY.

Regarding spot premiums/discounts, domestic refined nickel premiums rose slightly on Monday but began to decline as futures prices started to rise on Tuesday. As of this Friday (January 10), spot premiums stood at 2,900-3,200 yuan/mt, with an average price of 3,050 yuan/mt.

Macro side, the US dollar remained strong. LME continued to rise during the week, further widening the spot-futures price spread between domestic and overseas markets. Inventory side, the market was in a destocking phase this week. Overall, the fundamentals showed no significant short-term improvement, but with inventory reduction and macro factors, nickel prices are expected to continue fluctuating in the short term. The expected trading range for spot nickel prices next week is 121,400-129,000 yuan/mt, and for futures prices, 121,500-127,000 yuan/mt.

No Change in Bonded Zone Inventory During the Week

According to the latest SMM survey data, nickel inventory in the bonded zone this week was 4,900 mt, unchanged WoW.

Inventory:
During the week, SMM's six-location inventory totaled 39,855 mt, with a destocking of 364 mt WoW. Nickel prices rose slightly during the week. As futures prices increased, domestic spot premiums/discounts declined. However, overall market transactions remained sluggish, with slight destocking.