SHANGHAI, Apr 13 (SMM)—Nickel prices started to trend upward...

SHANGHAI, Apr 13 (SMM)—Nickel prices started to trend upward last week after the sideways fluctuation for most of March. The price increase was driven by macro sentiment. The decline in yields of 10-year US Treasury dragged down the US dollar to a two-week low, which promoted the overall price rise of non-ferrous metals. However, the nickel fundamentals could hardly support the price increase. Nickel spot trading continued to be sluggish, while NPI prices weakened after the purchase period. Nickel sulphate prices temporarily stopped falling last week, but the surplus is still expected to exist throughout April. Only the LME nickel briquette inventory decreased steadily, but the domestic spot transactions of nickel briquette weakened. On April 8, CNGR announced that it will continue to expand the development of laterite nickel ore and high-grade nickel matte with Tsingshan, Indonesia. The news is still bearish for forward supply and demand. It is expected that the forward surplus cannot bring high premiums to nickel. The pricing indicators of the near-term delivery products remain to be the inventory decrease of nickel briquette and the demand for nickel plate. Nickel prices will return to fundamentals after the macro sentiment stabilises. SHFE nickel is expected to move between 123,000~128,500 yuan/mt. LME Nickel is expected to run between $16,400-16,900/mt.

Stainless steel contract prices to remain rangebound this week

Stainless steel contract prices stood around 14,300 yuan/mt early last week. Driven by the rising nickel prices, the prices stood above the 5-day moving average during the week, and slightly rose to 14,700 yuan/mt on April 9. However, the pries are fluctuated in a gap higher range from the previous period and were facing strong pressure. The spot market stabilised last week, and there was no strong momentum to support the upward movement. The stainless steel contract prices rose and fell to 14,400 yuan/mt on April 9. The stainless steel market has been stable, and there is no strong long-short contradiction. Stainless steel contract prices are expected to fluctuate between 14,250-14,750 yuan/mt this week.

SHANGHAI, Apr 13 (SMM)—Nickel prices rose slightly last week due to macroeconomic factors, providing support to the price of nickel sulphate.

The market price of battery-grade nickel sulphate was 32,000 yuan/mt (crystal) last week, and the tradable price was 31,500 yuan/mt; spot trades were quieter than the prior week.

Battery-grade nickel sulphate price forecast this week: 31,000-32,000 yuan/mt (severe oversupply of nickel sulphate in March and a continued surplus in April; the slight increase in the price of nickel due to the macro impact should shore up nickel sulphate prices in the near term. The decline in nickel sulphate prices may slow down).

Premiums of battery-grade nickel sulphate over first-grade nickel (mainly nickel briquettes and powder) decreased 23% last week and averaged 16,718 yuan/mt in metal content, which was higher than the processing fees at precursor plants using nickel briquettes/powder to produce liquid nickel sulphate.

Nickel price rose slightly last week, which led to a slight increase in the price of nickel briquette, and also provided temporary support for the price of nickel sulphate to stabilise at 31,000-32,000 yuan/mt. Therefore, the premiums of nickel sulphate over the first-grade nickel continued to narrow.

Premiums of battery-grade nickel sulphate over first-grade nickel (briquette/powder) are expected to shrink further this week.

Profit margin of nickel sulphate produced with MHP and nickel briquettes continued to fall

Last week, the average weekly profit margin of liquefied nickel sulphate produced with self-solution nickel briquette stood at 8%, down 4 percentage points from the previous week; the average weekly profit margin of nickel sulphate produced by mainstream MHP was 3%, down 4 percentage points.

Stable prices of nickel sulphate and higher cost of nickel sulphate produced by mainstream MHP and nickel briquette drove lower overall profit margin.

SHANGHAI, Apr 9 (SMM)—This is a roundup of China's metals output in March 2021, from an exclusive survey of key producers by SMM analysts.

Nickel excerpts

China’s refined nickel output dropped 4.62%, or 632 mt, from February to 13,000 mt in March. Operating rates across nickel smelters only stood at 59% in March, down 9.4% from a year ago. The three smelters in Gansu, Xinjiang and Tainjin produced 12,000, 1,021 mt and less than 20 mt of refined nickel respectively in the month, while all smelters in other regions remained suspended.

SMM expects China’s refined nickel output to remain unchanged at 13,000 mt in April. The Xinjiang and Tianjin smelters will operate normally in April, the Gansu smelter may postpone its furnace maintenance to May, the Jilin smelter will restart production at the end of April, and smelters in Guangxi and Shandong will remain closed in Q2.

Nickel pig iron (NPI)

China’s NPI output increased 1.64% from February to 38,400 mt Ni in March. This included 30,700 mt Ni of high-grade NPI, down 2.26% on the month, and 7,800 mt Ni of low-grade NPI, up 20.6% month on month. Low nickel ore stocks drove some NPI plants to reduce high-grade NPI output in March, while surging output of #200 stainless steel led to the sharp rise in low-grade NPI output.

SMM expects China’s NPI output to drop 0.37% on the month to 38,300 mt Ni in April. Output of high-grade NPI is likely to dip 0.16% on the month to 30,600 mt Ni, while that of low-grade NPI to lose 1.17% to 7,700 mt Ni. NPI output in Q2 is likely to rebound as nickel ore shipments have gradually recovered from April.

Nickel sulphate

China’s nickel sulphate output jumped 43.67% from February and 106.07% from a year ago, to 98,500 mt or 21,700 mt in nickel content in March. This included 91,200 mt of battery-grade materials and 7,300 mt of electroplating materials. Nickel salts plants that suspended or reduced output during the Chinese New Year holiday have basically returned to normal production, and this, together with better economics of nickel briquette and strong demand from the new energy sector, resulted in the steep rise in battery-grade nickel sulphate output in March.

SMM expects China’s nickel sulphate output to increase 1.78% from March and 125.24% from a year ago to 22,100 mt Ni in April, as some nickel salts plants in Zhejiang province launched or expanded nickel briquette dissolving lines. A plant may overhaul production lines in April, which may lower nickel sulphate output by 2,000 mt.