Suddenly, commodities weakened, which is naturally somewhat related to the pullback in the black sector. The non-ferrous sector as a whole is weak, but there are exceptions, such as alumina. So, is the decline in nickel prices unexpected?
Nickel's downward break!
On Friday, the afternoon closing price of the main contract of Shanghai nickel was 128,750 yuan, up 0.16% for the day. The 3 p.m. closing price of LME nickel was $16,945, down 0.32% for the day. In terms of refined nickel, the nickel price fell sharply on Friday, with the domestic spot price of refined nickel reported at 128,250-130,650 yuan/ton, with an average price decrease of 4,600 yuan compared to the previous day; the average spot price of Russian nickel was -200 yuan against the nearest contract, an increase of 100 yuan compared to the previous day, and the spot premium for Jinchuan nickel was reported at 1,600-1,800 yuan/ton, with an average price increase of 250 yuan/ton compared to the previous day; LME nickel inventory reported 134,370 tons, an increase of 48 tons compared to the previous day. In terms of nickel sulfate, the price operated steadily, with the domestic spot price of nickel sulfate reported at 27,970-28,420 yuan/ton on Friday, with an average price decrease of 10 yuan/ton compared to the previous day.
Resource end: Overall tight, price support still exists!
The loss space of iron mill cost profit has narrowed, and at the same time, affected by the rainy season in the Philippines, iron mills are actively stocking up on nickel ore purchases, with overall tight nickel ore and price support still existing. On Friday, the CIF price of Indonesian domestic laterite nickel ore slightly fell and then stabilized, with the price of 1.6% grade Indonesian domestic laterite nickel ore reported at 50.6 US dollars/wet ton, an increase of 0.47 US dollars/ton compared to last week, and the CIF quote for 1.5% grade nickel ore produced in the Philippines was 52 US dollars/wet ton, with the price remaining the same as last week. The port inventory of nickel ore was reported at 14.19 million tons, a slight decrease of 1.0% compared to the same period last week.
Intermediate products: Not yet widened!
At present, the circulation of intermediate products has not yet widened, and upstream still maintains firm pricing, with coefficient prices operating steadily. Currently, the coefficient of MHP against LME nickel is 81, and the coefficient of high-purity nickel against LME nickel is 84.5. With the production of Indonesian wet intermediate product projects, it is expected that the raw material coefficient price will decrease.
Nickel sulfate: The stage of supply and demand game
This week, the price of nickel sulfate operated steadily. At present, the pricing logic of nickel sulfate is cost-based, and the discount of intermediate products is still at a high level. Under the background of rising nickel prices, the cost of nickel sulfate has increased, and the price bottom support still exists. In terms of supply and demand, nickel prices rose sharply during the holiday, and salt factories have a high pricing sentiment. Downstream material factories have mostly completed stocking up before the holiday, and the current willingness to buy is poor, and both parties are in a stalemate stage. It is expected that the price of nickel sulfate will operate steadily in the short term.Refined Nickel: Accumulation Trend!
The valuation of nickel prices continues to be repaired, with no significant changes in the fundamentals in the short term. In October, the release of intermediate product capacity in Indonesia was significant, and it is expected that the cost-end support will be weakened. At the same time, the demand side has not shown a clear improvement, and the trend of refined nickel accumulation continues. In terms of exports, they remain at a high level, but it is relatively difficult to continue to increase, and the price difference between the two markets has widened. Therefore, from the perspective of fundamentals, it is still necessary to treat it with a bearish mindset.
Nickel Iron & Stainless Steel: Peak Season Demand Awaits Release
Before the holiday, stainless steel futures rose strongly, and after the holiday, stainless steel spot prices caught up, but the spot transactions after the holiday were not as good as before the holiday. Downstream procurement was cautious, transactions weakened, and stainless steel prices fell again. On the supply side, the expected production of stainless steel in October decreased, and the peak season demand awaits release. On the cost side, the transaction price of nickel iron fell, and the cost support weakened, and it is expected that stainless steel will operate weakly and fluctuate.