1. Trend analysis

In 2019, the domestic nickel market showed a trend of small fluctuation and big ups and downs. According to the data monitoring of SunSirs, the nickel price rose sharply in 2019. At the beginning of the year, the nickel price was 89,508.33RMB/ton, and at the end of the year, it rose to 113,466.67RMB/ton, up 26.77%. Looking at the trend of nickel in the whole year, the increase of nickel was concentrated in July and August. Since the beginning of July, it has soared by 40.02% to the highest price of 141,366.67RMB/ton in the year on September 2. The highest price rose by 57.94% compared with the beginning of the year, reaching a five-year high since September 2014. In 2014, the ban on mining in Indonesia made nickel price increase nearly 50% in half a year.

According to the comparison chart of current nickel price of business association, the trend of current nickel price in 2019 is basically the same. Except for the large current price difference between the end of October and the end of November, the futures price is very close to the spot price. Close to the end of the year, the main basis is positive, which is a negative for buying hedging.

2. Market analysis

Nickel prices rose and fell in the first half of the year: from January to March, due to the rebound of financial data in January, monetary policy tends to be loose, Sino US trade negotiation results are good, and with the recovery of demand after the Spring Festival, according to the current price level, the steel mills are relatively profitable. After the festival, the steel mills may start a new round of resumption of production, with the increase of demand superimposed on the riots in Indonesia, nickel prices rise. From March to June, nickel price is in a downward trend. The decline in this stage is mainly due to the gradual introduction of new capacity of Xinhai nickel iron Co., Ltd. in Shandong Province. The market expects that there will be an excess supply of nickel iron. In addition, with the end of the rainy season in the Philippines, China's nickel port inventory begins to accumulate, and nickel price drops slightly.

In the second half of the year, nickel prices rose and fell sharply: at the beginning of July, Indonesia's earthquake and the restart of Indonesia's export ban, as well as the impact of the restart of 17 mine sound reviews in the Philippines, coupled with the impact of the shutdown of a nickel mine factory under vale in the early part of the previous period, which caused nickel supply concerns, resulting in a continuous 40% increase in nickel prices. In the beginning of September, Indonesia's ban on mining really hammered the news of nickel resources kujie in the Philippines, and nickel prices soared again The price of nickel soared nearly 60% to 140,000 yuan in two months. After the nickel price reached the highest price on September 2, Indonesia announced a new round of tax relief, as well as the drag of the downstream stainless steel price and the demand for new energy nickel, with the dust from the previous ban on mining in Indonesia falling, which was good for consumption. The nickel price recovered nearly 30% in the fourth quarter. With the implementation date of Indonesia's ban on mining approaching, nickel prices slightly recovered at the end of the year.

Indonesia's nickel import accounts for more than 1/ 3 of the total

As shown in the above table, China's total nickel imports in 2019 are expected to be about 70.6 million tons, of which 26 million tons are Indonesian nickel mines, accounting for 36.8% of the total, accounting for more than one third. If Indonesia's nickel mine stops exporting nickel ore on January 1, 2020, it will affect more than one third of the supply of nickel ore.

Nickel import and export volume in 2009-2019.

From 2009 to 2013, the net import of nickel increased year by year. From 2013 to 2018, the net import of nickel decreased gradually. In 2019, the net import of copper increased slightly. According to statistics, from January to October 2019, the import volume of nickel is 17,591,800 tons, and the export volume is 31,892 tons. In 2019, the annual import volume is estimated to be 211,100 tons, and the annual export volume is 38,300 tons.

Global and Chinese nickel production 2009-2019

In 2018 and 2019, global nickel production increased rapidly, while China's nickel production changed little. In 2017-19, China's nickel production was relatively small, mainly relying on imports. From January to November 2019, the global nickel production is 1,971,700 tons, and from January to November 2019, China's nickel production is 146800 tons.

Apparent consumption of nickel in 2009-2019

From January to October 2019, the apparent consumption of nickel in China is 276,100 tons, which is lower than that in 2018.

Stainless steel and lithium battery are two driving forces of nickel price demand

Public data shows that in 2019, China's primary nickel consumption is expected to reach 1.307 million tons, an increase of 11.3% year-on-year. In terms of consumption structure, the consumption of stainless steel primary nickel accounts for 84.7%, electroplating 4.6%, battery 4.6%, and stainless steel still dominates nickel consumption. It is expected that China's primary nickel consumption will reach 1.365 million tons in 2020, an increase of 4.5% year-on-year. From the perspective of global primary nickel consumption, stainless steel dominates nickel consumption and lithium battery nickel consumption grows fastest. It is estimated that by 2025, stainless steel accounts for 67% of nickel consumption and battery industry accounts for 17%; by 2030, stainless steel accounts for 63% and battery accounts for 22%.

Trend of downstream stainless steel

According to the price monitoring of SunSirs, the trend of downstream stainless steel in 2019 is basically the same as that of nickel in the whole year, but the magnitude of the earthquake is only about 10%. At the beginning of the year, the price of stainless steel was 13,525RMB/ton, with a slight drop of 1.17% to 13,366.67RMB/ton at the end of the year. The lowest price in the year was 13,042RMB/ton on June 19, and the highest price was 14,628RMB/ton on October 15, with an earthquake amplitude of 12.16%. In the first three quarters of this year, the domestic stainless steel output remained high, and the steel factory warehouse and social inventory climbed to a historical high. Therefore, the pressure of removing stainless steel warehouse at the end of this year continues to affect the market. After entering November, the production reduction of domestic mainstream steel plants has been implemented in succession. The price of stainless steel has fallen, which is bad for the demand of primary nickel, which also has a certain drag on the price of nickel. December is the off-season of traditional consumption of stainless steel. After routine maintenance of steel enterprises, stainless steel may enter into the situation of supply and demand.

New energy nickel demand hit

Since July, the growth rate of new energy vehicle production in China has changed from positive to negative. By 2020, subsidies in the field of new energy vehicles will be fully withdrawn, severely hitting the market's optimistic expectation of nickel demand in the field of new energy. In October, the output of new energy vehicles in China was 85,000, down 34.76% year on year. The negative impact of the decline of new energy subsidies is gradually obvious.

To sum up, the so-called ‘up Indonesia, down Indonesia’ nickel price in 2019, China's nickel production is very small and mainly depends on imports, while China's imports of Indonesia's nickel ore account for more than one third of the total imports of nickel ore in the whole year, Indonesia's restart of the ban caused a storm to the nickel market, but after the dust settled, Indonesia returned to the fundamentals, the apparent consumption decreased, downstream stainless steel and new Energy demand is weak, and nickel price falls sharply. From January 1, 2020, Indonesia officially started to ban mining. In 2020, Philippine laterite nickel ore export volume may be around 45 million wet tons, up 9.3% from 41.18 million wet tons in 19 years, equivalent to about 345,400 metal tons, which can supplement a little, but generally speaking, nickel is in short supply in 2020. In the first half of 2020, due to a large number of stainless steel manufacturers' stock, the real shortage or in the second half of 2020, the nickel price is expected to be under pressure in the first half of 2020, and the price in the second half of 2020 will be stronger, with the price range of 100,000-150,000RMB/ton.

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