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Nickel Price Less Supported amid Significantly Contained Demand by High Prices

2022-11-10
SHANGHAI, Nov 10 - On the supply side, rising SHFE nickel pushed up the absolute spot prices, which weighed on the consumption though the spot premiums kept falling. 

In terms of NPI, NPI plants were still firm to their prices, but downstream stainless steel mills did not agree with such price hike. On the demand side, due to steel mills boycotting overly low market quotes, the spot prices of 304 cold and hot rolled coil have risen slightly since yesterday afternoon, but the actual transaction price was still low, according to research. 

In terms of alloys, the orders of civil alloy were still less than expected. To sum up, the demand has been significantly contained by high prices across the nickel industry chain, and nickel price is now less supported.

Pure nickel: In the spot market, Jinchuan nickel was quoted with premiums of 4,800-5,000 yuan/mt as of November 9, with an average of 4900 yuan/mt, down 750 yuan/mt from a day ago. 

NORNICKEL nickel was offered at premiums of 3000-3300 yuan/mt, and the average premium was 3150 yuan/mt. The price lost 300 yuan/mt from the previous trading day. 



SHFE nickel surged after opening yesterday November 9, and the absolute spot prices also rose despite falling spot premiums. The market transactions were muted as a whole. 

In terms of nickel briquette, the prices stood at 195,200-195,800 yuan/mt, up 3,700 yuan/mt from the previous trading day. The transactions were poor for its meagre cost efficiency.

NPI: As of November 9, Ni 8-12% high-grade NPI was 1,377.5 yuan/mtu (ex-factory, tax included), down 7.5 yuan/mtu from the previous trading day. 

On the demand side, the stainless steel mills saw significantly accumulating in-plant stocks with expanding losses as well as poor terminal demand. Currently, the steel mills’ raw material stocks are able to sustain the production through November. 

Therefore, when the losses are severe and the terminal demand are lacklustre, the mills have lowered greatly their purchase prices of raw materials, with no successful transactions recently. 

On the supply side, the NPI plants were unwilling to reduce the prices either as they were also challenged by mounting costs. It is expected NPI prices will remain stable in the short term with the intensive tug-of-war between the suppliers and buyers, but are likely to fall in the long run. 

Stainless steel: As of November 9, the prices of spot stainless steel in Wuxi and Foshan were relatively stable. 
Due to steel mills boycotting overly low market quotes, the spot prices of 304 cold and hot rolled coil have risen slightly since yesterday afternoon, but the actual transaction price was still low, according to research.

In terms of cost, NPI prices fell slightly recently, but are likely to stabilise in the near future with the game between the supply and demand side. 

The spot prices of ferrochrome were stable as well. 
Ferrochrome plants wished to resume the production on falling cost, in addition to digested in-plant stocks. The supply tightness of ferrochrome is likely to ease, and the prices will remain stable as a whole.

On the whole, the spot prices of stainless steel will run steadily with occasional drops in the short term. 
The prices of 304 cold-rolled coils moved between 16,900-17300 yuan/mt, and the prices of 
304 hot-rolled coils were between 16250-16,750 yuan/mt. 
316L/2B was reported at 28,900-29,200 yuan/mt in morning trade, 
201/2B at 9,950-10,050 yuan/mt, and 430/2B at 7,800-8000 yuan/mt. 
As of 10:30 am (Beijing time), the SHFE SS 2211 contract stood at 16550 yuan/mt, 
and the spot premiums in Wuxi were 520-920 yuan/mt. 
(Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt)

Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.