Pure Nickel Demand Remained Poor, and Nickel Prices Deviated from the Fundamentals

SHANGHAI, Sep 15 (SMM) - In August, local governments in China adopted different measures to control energy consumption to cope with the hot weather, which further tightened the supply of nonferrous metals and raised the prices. In September, the US Fed Chairman Powell once said again that the Fed’s task is to reduce inflation to the 2% target. In addition, it is worth noting that the current US labour market demand is still very strong, which also indicates that the rate hike may achieve a soft landing. As a result, nickel prices soared to around 198,000 yuan/mt as of September 13. The rigid demand from the alloy sector still exists. The demand for pure nickel from civil alloy remains poor amid the high futures prices, while the demand from military alloy is better, and the manufacturers mainly hold a wait-and-see attitude because of the unstable pure nickel prices. The current nickel prices are greatly affected by macro factors, and in the short term, the prices may drop amid the weak downstream demand. Considering that the Indonesia NPI and the intermediate product projects are put into production one after another, the nickel market may see a supply surplus. Therefore, the long-term nickel prices will trend lower.