SMM Nickel Market Morning Comment (Apr 22)

Nickel prices fluctuated last week, closing at 140,910 yuan/mt on Friday, exceeding 140,000 yuan/mt again. At the beginning of last week, affected by lower-than-expected US inflation data, nickel prices fluctuated downward to the lowest at 133,780 yuan/mt. Later, boosted by macro environment and industrial chain, nickel prices rose. From a macro perspective, due to overseas geopolitical conflicts, funds flowed into the non-ferrous sector with strong liquidity driven by risk aversion sentiment, so non-ferrous metals prices rose overall. Another noteworthy event is that Russian nickel was again sanctioned by the US and Britain, and it influenced the delivery properties of Russian nickel on the LME. Last week saw production resumption after Lebaran holiday in Indonesia. However, since RKAB approval still presented no progress, nickel ore supply uncertainties continued. Concerns about raw material supply have become the focus of attention in the nickel industry chain recently, and nickel prices have also been supported by the industry chain. Fundamentally, domestic inventory fell slightly last week. SMM surveys showed that transactions in the spot market were thin last week due to high nickel prices. Therefore, it is predicted that the export of domestic nickel plates may have increased slightly last week. At the same time, overseas inventories continued to drop last week, with warehouses in Asia still being the main force. Demand side, according to SMM research, alloy special steel downstream is expected to usher in the peak season in Q2, providing some support for nickel plate demand in the future. In addition, while terminal profits exist, the downstream may accept a higher nickel price for essential needs. In summary, nickel prices were guided by macro sentiment last week. The upstream supply was not released, while the downstream profits remained relatively stable supported by raw material prices. If raw material supply cannot be released, SHFE nickel prices are expected to rise this week.