SHFE Nickel Once Fell by More Than 3%, But Rebounded amid the Low Inventory

SHANGHAI, Aug 2 (SMM) - SHFE nickel fell overnight and continued to decline today. SHFE nickel once fell 3.27%, but the decline narrowed to 0.99% as of the closing of the day. As of 15:02, LME nickel fell by more than 1.46%.

Spot market: The average spot price of SMM1# refined nickel today was 186,300 yuan/mt, down 3.15% from yesterday. In terms of nickel briquette, the prices of nickel briquette was 183,700-184,400 yuan/mt, down 5,050 yuan from yesterday, mainly because the futures fell slightly. In addition, due to the high nickel briquette prices, the transaction of nickel briquette was poor.

According to SMM, on the supply side, the SHFE nickel prices were high and the profits of overseas pure nickel expanded. However, the volume of customs clearance was lower than expected. Despite of the high temperature, the mainstream domestic refined nickel manufacturers remained normal production. The shipment of Indonesia NPI to China increased obviously and the domestic and overseas NPI supply was higher than demand, which was unfavourable for NPI prices.

On the demand side, the spot prices stopped falling and stabilised. Although the market expected the prices to rise last weekend, the transactions were still flat. In terms of alloy, the absolute spot prices continued to rise, hence the demand of pure nickel from alloy sector decreased.

To sum up, although the demand for pure nickel was weak, the nickel prices may gain support from the low inventory.