SunSirs: Disturbance at the Nickel Mining End, Nickel Prices Slightly Increased (August 21-25)

Price trend

According to the monitoring of nickel prices by SunSirs, nickel prices slightly increased this week. As of August 25th, the spot nickel quotation was 171,750 RMB/ton, an increase of 0.79% from the beginning of the week and a year-on-year decrease of 3.21%.

According to the weekly rise and fall chart of SunSirs, nickel prices had risen in 7 weeks and fallen in 5 weeks in the past 12 weeks, with a slight increase in recent times.

Analysis review

Macroscopically, new economic data from Europe and the United States was released. The PMI values of European and American countries in August were lower than market expectations, reducing market expectations for further interest rate hikes by the European and American central banks and raising expectations for possible interest rate cuts next year. Driven by China's stimulus policies, risk appetite had increased, while July's consumption data showed strong performance, providing upward momentum for the non-ferrous metal market.

In terms of supply: In July 2023, the national refined nickel production reached a total of 21,500 tons, an increase of 5.39% compared to the previous month and a year-on-year increase of 34.38%. In late August, the 50,000 ton/year refined nickel project in Qingshan, Indonesia was officially put into operation. Indonesia's anti-corruption review led to the suspension of RKAB issuance, increasing concerns about tight supply of nickel ore, and expectations of future raw material tightening in the nickel industry chain.

In terms of demand: Alloys were the main downstream of pure nickel, with better demand for alloys such as military and shipbuilding, while civilian alloys were not good. The electroplating industry was generally affected by the off-season, and downstream demand orders were poor. The pressure on stainless steel inventory was showing, but currently maintaining high production schedules had some support for the demand for pure nickel. Pure nickel was basically not used in new energy. It is expected that the downstream consumption of pure nickel will continue to increase in late August, but the marginal increment will be limited.

Market outlook

In summary, the news of nickel mines had disrupted nickel prices, and market sentiment had provided support for nickel prices. However, downstream acceptance of high prices remained weak, and the spot premium remains under pressure. Meanwhile, the market revealed that the production of Indonesia's refined nickel project would also limit the space above nickel prices. I It is expected that in the short term, nickel prices may continue to fluctuate at high levels.

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