SHFE Nickel Prices Soar, and Spot Trading Becomes Extremely Slack

SHANGHAI, Feb 22 (SMM) - SHFE nickel warrants hovered around low levels, arousing a wild fluctuation in nickel prices. SHFE nickel prices moved rangebound with occasional ups yesterday, and the spot trading was poor. NPI sellers raised their quotes yesterday as nickel prices and stainless steel futures prices were on the rise. On the demand side, according to SMM research, the recent #304 hot-rolled coil transactions were acceptable. Besides, yesterday, a stainless steel mill in east China tentatively decided not to ship #304 hot-rolled coils to the east China market next week so as to gradually ease the inventory pressure of hot-rolled coils. The futures prices edged higher. Spot quotes of cold-rolled coils rose slightly within the day, but the transactions were average. Warrant trading also weakened. Alloy companies were less willing to purchase pure nickel amid the high prices. In general, pure nickel demand grew slightly. SMM presumes that nickel prices will remain rangebound.

Pure Nickel: On February 21, premiums of Jinchuan nickel were 6,500-6,800 yuan/mt. The average premium stood at 6,650 yuan/mt, down 700 yuan/mt from at the trading day. NORNICKEL nickel was quoted at premiums of 4,500-5,000 yuan/mt, with an average premium of 4,750 yuan/mt, down 400 yuan/mt from a day ago. SHFE nickel warrants hovered around low levels, arousing a wild fluctuation in nickel prices. The nickel prices moved rangebound with occasional ups yesterday, and the spot trading was poor. Prices of nickel briquettes were 211,400-212,400 yuan/mt, up 6,850 yuan/mt from the previous trading day. Nickel briquette trading was poor as the prices were still higher than the nickel sulphate prices.

NPI: On February 21, the average price of SMM Ni 8-12% high-grade NPI was 1,350 yuan/mtu (ex-factory, tax included), flat from the previous trading day. NPI sellers raised their quotes in the past few trading days as nickel prices and stainless steel futures prices were on the rise.  As spot stainless steel orders have picked up, stainless steel mills have also begun to make inquiries. Thousands of metric tonnes of NPI were traded at 1,370 yuan/mtu by a stainless steel mill in east China yesterday. The overall nickel ore prices remained high. NPI plants got relatively firm cost support. In addition, Indonesia NPI may arrive in a concentrated manner at the end of February and early March. At that time, it is necessary to pay attention to whether it will change the poor liquidity of Indonesia NPI in the domestic spot market. SMM expects that the short-term NPI prices will be stable with some upward potential.

Stainless steel: On February 21, the spot prices of stainless steel in the Wuxi and Foshan markets stabilised with some ups. According to SMM research, the recent #304 hot-rolled coil transactions were acceptable. Besides, yesterday, a stainless steel mill in east China tentatively decided not to ship #304 hot-rolled coils to the east China market next week so as to gradually ease the inventory pressure of hot-rolled coils. The futures prices edged higher. Spot quotes of cold-rolled coils rose slightly within the day, but the transactions were average. Warrant trading also weakened. On the whole, stainless steel mills have recently controlled the pace of shipments, and social inventory may decrease slowly. It is expected that the spot prices of stainless steel will temporarily stabilise in the short term. The #304 cold-rolled coil in Wuxi was quoted at 17,000-17,300 yuan/mt, and the average price across China stood at 17,020 yuan/mt. Prices of #304 hot-rolled coils in Wuxi were 16,600-16,800 yuan/mt, and the average price across China was 16,705 yuan/mt. Quotes of #316L cold-rolled coils in Wuxi moved between 33,600-34,000 yuan/mt, and the average price across China was 33,800 yuan/mt. Quotes of #201J1 cold-rolled coils in Wuxi moved between 9,650-9,750 yuan/mt, and the average price across China was 9,740 yuan/mt. #430 cold-rolled coils in Wuxi were quoted at 8,300-8,500 yuan/mt, and the average price across China stood at 8,440 yuan/mt. As of 10:30 a.m. yesterday, the SHFE SS 2303 contract stood at 16,780 yuan/mt, and the spot stainless steel premiums in Wuxi were 390-690 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt)