Spot Nickel Trading was Sluggish Despite the Dropping Nickel Prices

SHANGHAI, Mar 20 (SMM) - Last week, overseas banking crisis aroused panic in the market and sent nickel prices into a nosedive. In detail, the US Fed's rate hikes resulted in liquidity risks in banks. On March 11, the Silicon Valley Bank collapsed suddenly. The US Treasury Department stated on the evening of March 13 that it would address the crisis. On March 15, Credit Suisse also crashed due to liquidity risks. The Swiss National Bank later claimed to provide liquidity support to Credit Suisse. The banking meltdown led to panic in the financial market, and risky assets such as stocks and futures were sold off. Meanwhile, prices of precious metals and other investment products with a value-preserving function rebounded. According to CME Fed Watch Tool, the probability that the US Fed will continue to raise interest rates at the March meeting is less than 50%, and the chance that interest rates will stay unchanged is 59.4%. The probability of a rate hike of 25 basis points is 40.6%, while that of a 50-basis point hike remains at 0%. In terms of fundamentals, the import window remained closed, leading to fewer customs clearance of NORNICKEL nickel. Traders delivered the SHFE 2303 nickel contract by their spots owing to the poor downstream demand. Chinese pure nickel manufacturers maintained normal production and shipment last week. Demand in the peak season still did not boom, resulting in orders placed by downstream enterprises falling short of expectations. The market shall not be overly pessimistic about the nickel prices since the pure nickel stocks stand low and that the US Fed is less likely to raise the interest rates sharply at March meeting.