SunSirs: Nickel Price Dropped Sharply This Week (January 3-6)

Price trend

According to the nickel price monitoring of SunSirs, the nickel price rose first and then fell this week. As of January 6, spot nickel was quoted at 216,683.33 RMB/ton, down 8.24% from the beginning of the week and up 40.86% year on year.

According to the weekly ups and downs chart of SunSirs, the nickel price rose for 8 weeks and fell for 4 weeks in the past 12 weeks, and fell sharply after the recent nickel price strengthened.

Analysis review

On the macro level, the latest interest rate minutes of the Federal Reserve emphasized the determination to fight against inflation, and increased the market's concern about the long-term recession expectation of the United States.

Supply: As of January 6, the nickel electrodeposition products entrusted by Qingshan to a new energy enterprise in Hubei Province had been officially produced. The preliminary design capacity is 1,500 tons per month, and some of them will be released in January. From the perspective of production, after the new capacity is put into operation, the contribution to the marginal growth of domestic refined nickel output in 2023 may reach 18000 metal tons, and after the process is mature, capacity expansion is also possible. Qingshan nickel electrowinning project with a monthly production capacity of 1,500 tons had been successfully produced. In January, part of the volume will be released and the nickel price will be under pressure.

Demand: The growth of new energy demand slowed down, and the price of battery grade nickel sulfate continued to fall. The demand for nickel element decreases due to the decrease of stainless steel production schedule.

Market outlook

To sum up, it is estimated that the fundamentals of pure nickel are still tight in the first quarter. The expected capacity of the 1,500t/month nickel electrowinning project in Qingshan will be gradually released, and the output volume may be limited in the short term, which is difficult to ease the contradiction between the current tight pure nickel and low inventory. The current downstream demand is weak, and nickel price is expected to be weak.

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