Review and Forecast of Nickel Spot Market

SHANGHAI, Jul 14 (SMM) - The non-ferrous metals market has been under pressure after the Fed's interest rate hike, shrinking balance sheet and other monetary tightening policies in early June, which rattled the nerves of market players. During this period, the domestic pandemic situation improved significantly. The operating rates of downstream manufacturers such as alloys and batteries increased, and the lower spot price of pure nickel also encouraged downstream purchases of pure nickel. In terms of nickel briquette, the prices of briquette were higher than nickel sulphate for quite some time, and some salt factories thus sold off the briquette. However, the high nickel briquette prices have prevented stainless steel mills and alloy plants to purchase in large amount, hence there were few transactions for briquette.

It is expected that the supply of pure nickel will improve in July. The main reason is that the salt factories, that resumed the production of refined nickel amid lucrative profits, have reached normal production in July, and the output is also circulating in the market. According to the SMM research, the domestic refined nickel production added 8.74% MoM and 9.07% YoY in June, and is expected to rise further in July. In addition, although the current SHFE/LME price ratio of pure nickel has been dropping, LME nickel is likely to fall further in the context of a bear market. Coupled with weak domestic demand in July, the supply will be relatively sufficient against the demand situation.