SunSirs: Supply Was Loose, and Nickel Prices Slightly Lowered (September 4-8)

Price trend

According to the monitoring of nickel prices by SunSirs, nickel prices rose first and then fell this week. As of September 8th, the spot nickel quotation was 16,803.33 RMB/ton, a decrease of 2.33% from the beginning of the week and a year-on-year decrease of 7.87%.

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

Analysis review

On the macro level, the strong performance of the US economy had exacerbated inflation concerns, driving the US dollar up to high levels, and non-ferrous metals generally falling under pressure.

In terms of supply: The national refined nickel production in August was approximately 21,700 tons, an increase of 0.7% month on month and an increase of 39.68% year-on-year. Indonesia had 50,000 tons/year of new production capacity. Recently, Russia had extended its export reduction measures until the end of the year.

In terms of demand: The rapid development and promotion of the new energy industry, especially the widespread application of renewable energy such as solar and wind energy, have led to a significant increase in demand for nickel. Nickel is an important raw material in new energy batteries, such as lithium-ion batteries, nickel hydrogen batteries, and nickel cobalt manganese lithium batteries, which all require a large amount of nickel. Although stainless steel scheduled production remained high from August to September, the month on month change was relatively limited. Recently, there was a significant rebound in stainless steel warehouse orders, and upward pressure was still evident.

Market outlook

In summary, the changes in Indonesia's nickel mining policies continued to ferment, and the rainy season in the Philippines was approaching, further exacerbating the tight supply atmosphere in the nickel mining market. However, the domestic pure nickel supply and demand pattern may continue to be loose, with new production capacity constantly expanding, and LME nickel destocking slowly. It is expected that nickel prices will mainly fluctuate to be weaker in the short term.

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