SMM Nickel Market Morning Comment (Mar 11)

Nickel prices continued to rise last week, reaching 138,480 yuan/mt by last Friday, but they dip briefly earlier last week because Indonesia approved nickel ore mining quotas more quickly. On the macro front, Federal Reserve officials hinted that they might lower interest rates later this year since the economy and monetary policies look good. Inflation slowed significantly last year, but officials warn that this trend may not persist this year, advising policymakers to be cautious. As a result, the US dollar dropped, encouraging investment in commodities. China’s Two Sessions discussed implementing four key actions, including "equipment updates" and "replacing old with new." The continuous growth in high-quality development is projected to drive increasing demand for equipment updates, particularly benefiting the downstream nonferrous sector due to the essential role of nonferrous metals in manufacturing various equipment. So nonferrous market performed well last week. From a fundamental perspective, refined nickel inventory is increasing. The growing price gap between domestic and international markets is boosting export profits for refined nickel, possibly resulting in higher nickel plate exports this month. However, high nickel prices are dampening downstream purchasing sentiment, leading to low spot transactions. Looking at the medium to long term, there's expected growth in 300 series stainless steel production in March in the downstream sector, supported by macro policies. This might bolster demand for pure nickel in the future.