Spot Nickel Trading is Sluggish Despite Dropping Nickel Prices

SHANGHAI, Mar 13 (SMM) - Nickel prices trended lower last week as many bearish macro factors emerged. After nearly a year of rate hikes, the US inflation rate is higher than the target of 2%. On the evening of March 7, US Fed’s Powell made a speech indicating that it is necessary to accelerate the pace of rate hikes in the future. The US ADP employment data on March 8 was higher than market expectations, confirming the resilience of the current US labour market, which aroused market concerns about a sharp rate hike in the future and sent nickel prices into a nosedive. In terms of fundamentals, on the supply side, some new Chinese electrowinning nickel capacities were released in February, and the output rose by nearly 5.49% from January. It is expected that domestic electrowinning nickel output will continue to increase in March. Last week, the price difference between imported pure nickel and Jinchuan pure nickel widened rapidly. In addition, the expected output growth of high-quality Chinese electrowinning nickel in March, will threaten the market share of NORNICKEL nickel. In this context, the NORNICKEL nickel premiums plunged last week. On the demand side, affected by the downturn of commodity prices, the prices of alloy products slumped, and the profit margins of manufacturers have not yet restored. Therefore, alloy manufacturers mainly produced according to their orders and purchased raw materials on demand. It is expected that the downward space of nickel prices may narrow in late March, mainly because the prices have plummeted due to bearish news at the beginning of this month, and that the pure nickel inventory has not yet seen a large accumulation. In addition, the peak season will also beef up the prices.