Refined Nickel Transactions Were Sluggish Before the Year, with Premiums and Discounts Dropping Rapidly This Week [SMM Analysis]

Refined Nickel Transactions Sluggish Before the Holiday, Spot Premiums Dropped Rapidly This Week

This week, nickel prices fluctuated upward, with spot prices ranging between 126,950-130,700 yuan/mt, while SHFE nickel futures prices fluctuated between 125,700-128,800 yuan/mt.

In terms of market transactions, no significant activity was observed this week. Supply side, although smelters' operating rates declined slightly, the overall supply remained at a high level. Demand side, downstream enterprises are expected to start their holiday break next week, further weakening purchase willingness. Therefore, traders actively reduced spot premiums for Jinchuan brand to expedite sales before the deadline. As of this Friday, January 17, Jinchuan brand spot premiums dropped to 1,500-1,900 yuan/mt, with an average of 1,700 yuan/mt, down by 1,350 yuan/mt WoW.

Macro side, LME nickel prices continued to fluctuate upward this week, further widening the spot-futures price spread between domestic and overseas markets. Inventory side, bonded zone inventory increased WoW.
In summary, the fundamentals showed no significant short-term improvement, while inventory levels increased this week. Nickel prices are expected to continue fluctuating in the short term. The forecasted spot nickel price range for next week is 125,300-130,000 yuan/mt, and the futures price range is 125,500-128,300 yuan/mt.

Bonded Zone Inventory Increased This Week

According to the latest survey data from SMM, nickel inventory in the bonded zone reached 5,400 mt this week, an increase of 500 mt WoW.

Inventory:
This week, SMM's six-region inventory totaled 42,397 mt, up by 2,542 mt WoW. Nickel prices rose slightly during the week. As futures prices climbed, traders rushed to sell, leading to a rapid decline in domestic spot premiums. However, overall market transactions remained sluggish.