NICKEL NEWS, page-264

Intraday SHFE Nickel Recorded A Gain of Over 5% amid Low Inventory

Feb 8, 2022 10:33CST

Source:SMM

In the first trading day post the Chinese New Year (CNY) holiday, intraday SHFE nickel once recorded a gain of 5%, and closed the day with an increase of 3.25% on Monday.

SHANGHAI, Feb 8 (SMM) - In the first trading day post the Chinese New Year (CNY) holiday, intraday SHFE nickel once recorded a gain of 5%, and closed the day with an increase of 3.25% on Monday.

SMM believes that the high nickel prices were still supported by tight supply and high demand, which resulted in continuously falling pure nickel inventory.

In the spot market, there were currently few quotes and shipments amid tight supply, according to SMM research. On the other hand, some downstream participants have not resumed the production yet, and the violently fluctuating prices also suppressed the demand.

In terms of inventory, LME stocks dropped 3,096 mt to 87,504 mt, a decrease of 3.5%, a historical low. Though it is expected there will arrivals in the market, the robust downstream demand will keep the pure nickel supply tight. As of February 7, SMM social pure nickel inventory dropped 70 mt from the pre-holiday level, and the inventory failed to realise an increment.

Meanwhile, the shipments of nickel matte to CNGR and GEM continued during the CNY holiday. However, the shipments were small as the products were from trial production. In other words, the demand for pure nickel will stay high until the mass production of nickel matte.

In addition, the supply and demand of nickel sulphate and NPI were relatively balanced currently, and the prices are expected to rise further after a new round of restocking kicks off.

In general, SMM believes that the situation of low inventory and high spot premiums will sustain in the short term, allowing nickel prices to maintain its upside momentum.