Price trend

This week (3.8-3.14), the macro sentiment was positive, with cost support and a strong upward trend in the nickel market. According to the monitoring of nickel prices by SunSirs, as of March 14th, spot nickel was quoted at 134,991 RMB/ton, with a weekly increase of 3.31%, reaching a new high in the past five months.

Analysis review                                                         

Macroscopically, on March 13th, Alphamine Resources announced the suspension of production at its Bisie tin mine due to the escalation of local conflicts in the Democratic Republic of Congo, which has led to a surge in tin prices and boosted the non-ferrous sector. Recently, there have been frequent policy disturbances in Indonesia. The Indonesian government has proposed to change the nickel ore tax rate from a fixed 10% to 14% -19%, the nickel pig iron tax rate from a fixed 5% to 5% -7%, and the nickel matte tax rate from 2% to 4.5% -6.5%. These tax rates are adjusted according to the HMA price (benchmark price), and the policy has not yet been implemented. The February CPI data in the United States was lower than expected, with PPI rising 1.7% year-on-year, lower than the expected 2.0%, further easing market concerns about stagflation. Market expectations for the Federal Reserve's interest rate cuts have risen, boosting the non-ferrous sector.

Supply side: In the short term, Indonesia's Ramadan nickel mine is tight, with significant cost support.

Inventory: High inventory was under pressure, and the driving force behind the rise in nickel prices was insufficient. On March 14th, the inventory of Shanghai nickel warehouse receipts was 27,767 tons, an increase of 1,085 tons during the week; On March 14th, LME nickel inventory was 200,580 tons, an increase of 2,058 tons for the week.

Demand side: Mainly for essential procurement, with a slight increase in stainless steel prices. The recovery of demand still fell short of expectations, and overall demand has not seen a significant increase. As of March 14th, the daily average price of spot 304/2B stainless steel flat plate 1.0 * 1219 * 2438 (tolerance 0.91) was quoted at 12,571.43 RMB/ton, an increase of 1.13% from the beginning of the week and a decrease of 2.41% year-on-year.

Market outlook

Macro sentiment was boosted, high inventory suppressed upward resistance, Indonesian policies underwent significant changes, and nickel prices are expected to fluctuate within a range.

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