SunSirs: Downstream Acceptance Was Weak, Nickel Prices Showed a "Roller Coaster" Trend (September 19-23)

Price trend

According to the nickel price monitoring of SunSirs, nickel prices rose first and then fell this week. As of September 23, the spot nickel price was 196,116.67 RMB/ton, down 0.58% from the price of 197,266.67 RMB/ton at the beginning of the week, and up 33.75% year-on-year.

Analysis review

According to the weekly change chart of SunSirs, in the past 12 weeks, nickel prices rose in 4 weeks and fell in 8 weeks. Recently, nickel prices have fluctuated widely.

On September 22, LME nickel inventory was 52,248 tons, a decrease of 186 tons from the previous day. In the past month, LME nickel inventories have decreased by 3,480 tons, a decrease of 6.2%.

On the macro front, at 2:00 a.m. on Thursday, September 22, Beijing time, the Federal Reserve announced its September interest rate decision as scheduled, raising interest rates by 75 basis points again. The Fed's 75 BP hikes were in line with market expectations, and the Fed's determination to fight inflation remained unchanged. The Russian-Ukrainian conflict continues to escalate, the logic of inflation trading still exists, and Europe is about to enter the winter, the trading of hyping the energy crisis is expected to reopen. The macro is currently intertwined with long and short positions, and there is a risk of stagflation.

On the supply side, as the rainy season in the Philippines is approaching, ferronickel plants have begun to stock up, and mine offers are strong. Nickel ore prices are easy to rise and hard to fall, and cost support has emerged again. Therefore, supply and demand have supported nickel prices. On the demand side, the arrival of "golden September and silver October", the stainless steel production schedule has increased significantly in September, the demand for stainless steel is expected to increase, and prices rise. In the early stage, steel mills continued to reduce production, and stainless steel transactions were hot. At present, there are few spots that can be circulated in the market. In addition, due to the long National Day holiday, stocking up before the holiday, stainless steel destocking is quicker, and overseas production has been reduced more, and hot-rolled exports have increased.

Market outlook

Supported by low inventories and signs of improvement in downstream demand, and boosted by news, nickel prices rose to periodic highs, but downstream acceptance of high-priced resources was weak and dragged down nickel prices. In addition, as the Fed raised interest rates by 75 basis points at the overnight meeting on interest rates, which once suppressed the trend of non-ferrous metals, nickel prices began to fall. However, the resonance between low inventory and news surface still supports nickel prices, and it is expected that nickel prices will maintain a wide fluctuation trend in the short term.

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