Ann: Quarterly Activities Report, page-67

SHANGHAI, Aug 4 (SMM) - Stainless steel futures prices continued to rise in July. As of July 30, the most traded stainless steel contract closed at 19,995 yuan/mt, an increase of 3,165 yuan/mt or 18.8% from the end of June. However, the prices fell sharply in the first two trading days in August.

Spot prices of stainless steel kept hitting record highs in July. SMM price of 304/2B coil-raw edge (Wuxi) averaged 20,550 yuan/mt on July 30, up 17.77% from the 17,450 yuan/mt at the end of June.

The cost of raw materials increased in July, due to the tight supply of NPI and ferrochrome. Ferrochrome output was limited amid the power curtailment in Inner Mongolia, Hunan, Guangxi, and other regions. The output in Inner Mongolia was nearly halved.

Spot supply was tight as well, and the resource replenishment was scarce in the short term, leading to the low inventories in downstream industries. At the same time, nickel futures kept rising to drive up the prices of stainless steel futures and spots.

Stainless steel futures fell back after hitting a new high on August 2. In the spot market, some traders slightly lowered the prices of 304 cold-rolled products due to the downward futures on August 3.

According to traders, the market supply was still tight. Tens of tons of resources from Delong arrived every day, but there were some previously booked spots to be delivered. The price decline in the spots was not obvious amid the tight supply and low inventories. At the end of July, the total inventory of the 300 series stainless steel fell below 400,000 mt, the lowest level since 2020.

Under the prevention and controls of the recent domestic pandemic, 22 expressway toll station have been closed in Nanjing, Taizhou, Yangzhou, Nantong, and Suzhou. The transportation and delivery is impeded in Wuxi, but the overall impact was little, with slight delay in the delivery.

It is expected that stainless steel will still fluctuate at high levels in August.

SHANGHAI, Aug 4 (SMM) - Nickel prices fluctuated higher in July and reached a new high at 148,780 yuan/mt since February this year. Nickel futures closed at 146,900 yuan/mt on July 31, up 8,840 yuan/mt or 6.4% from the end of June.

Nickel stocks across the LME listed warehouses kept falling to 214,632 mt on July 30, down 17,844 or 7.7% mt from June 30. The stocks across SHFE warehouses increased to 6,939 mt on July 23, up 839 mt or 13.75% from June 28.

The market has not seen obvious long or short trend, and funds are mainly in short-term operations. The current downward room is limited, and the overall prices are likely to keep rising with the fundamental support.

At present, the focus of nickel-based market transactions is still on the stainless steel and new energy markets. Nickel demand by stainless steel market is expected to decline in August, as the production will be reduced amid the power curtailment.

However, the overall stainless steel production is still scheduled high, and the raw material supply is not loose. The production cut on stainless steel will support the prices to stand high amid the high demand.

The new energy production line will also maintain high demand for nickel in August, with the self-dissolving amount of nickel briquette at 11,000-12,000 mt/month (ni content). Therefore, nickel supply is expected to remain in short in August.

The recent severe pandemic in Indonesia may affect the construction of upstream new capacities and the production progress. Nickel prices are expected to move between 140,000-152,000 yuan/mt in August.