SunSirs: Strong Supply and Weak Demand, Nickel Prices Slightly Declined (September 11-15)

Price trend

According to the monitoring of nickel prices by SunSirs, nickel prices had slightly declined this week. As of September 15th, the spot nickel quotation was 164,783.33 RMB/ton, a decrease of 1.47% from the beginning of the week and a year-on-year decrease of 16.48%.

According to the weekly rise and fall chart of SunSirs, in the past 12 weeks, nickel prices decreased in 7 weeks and increased in 5 weeks. Recently, nickel prices declined weakly.

Analysis review

On the macro level, the release of US CPI data had eased market tension. The resilience of US economic data had fueled a collective rise in the stock market, while the central bank's reserve requirement reduction had boosted market sentiment. Domestic social inventory once again shifted towards deleveraging to provide price support. The continuous introduction of favorable policy dividends for the real estate industry in China had brought warmth to the real estate industry, boosting the steady growth of industries such as construction.

On the supply side: frequent disturbances at the Indonesian mining end; The rainy season was approaching in the Philippines; Due to pollution issues, the Indonesian government had recommended five nickel mines to suspend production and rectify, providing support for nickel prices. However, domestic electrolytic nickel production continued to increase in volume, and spot transactions of refined nickel were weak. Pure nickel supply suppressed nickel prices and the focus shifted downwards. In August 2023, the national refined nickel production totaled 21,800 tons, with a month on month increase of 0.93% and a year-on-year increase of 40.65%. It is expected that the national refined nickel production in September will reach 23,000 tons, with a month on month increase of 0.55% and a year-on-year increase of 49.35%.

In terms of demand: Alloys are 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 maintaining high production schedules had some support for the demand for pure nickel. Pure nickel was basically not used in new energy.

Market outlook

In summary, the new production capacity of pure nickel was gradually put into operation, and the demand side remained stable, while the supply and demand margin of pure nickel had weakened. The domestic nickel supply was strong and the demand was weak. With the release of new production capacity, the long-term trend of nickel prices is downward, but there is still a lot of short-term mining news disturbance, which forms support for nickel. Nickel prices are expected to fluctuate widely.

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