1. Trend analysis
According to nickel price monitoring by SunSirs, nickel prices fell slightly on the 2nd. The spot nickel price was 118,500 yuan/ton, down 1.74% from the previous trading day, up 4.19% from the beginning of the year, and down 13.19% year-on-year.
2. Market analysis
From a macro perspective, the second wave of the global epidemic has soared and the European blockade has intensified. Investors are increasingly worried about global economic growth and metal demand. At the same time, the strengthening of the U.S. dollar makes U.S. dollar-denominated commodities more expensive for holders of other currencies. It also put further pressure on metal prices. On the supply side, the rainy season is approaching in the Philippines, and the shipping volume of nickel ore has dropped significantly. The domestic nickel ore replenishment window has passed, and the port nickel ore inventory is at a low level in recent years. The raw material inventory of ferronickel plants is less than March. In the fourth quarter, domestic ferronickel may enter a substantial reduction in production. However, the production capacity of ferronickel stainless steel in Indonesia will continue to be put into production, and future supply will further increase, squeezing the domestic market. Judging from the situation of downstream stainless steel companies, the current inventory of 300 series stainless steel in Wuxi and Foshan is still high, and consumption at the end of the year is weak, and the demand side boost is expected to be limited. Indonesia produced 55,700 metal tons of ferronickel in September, an increase of 6.49% month-on-month.
3. Outlook
The recent spike in nickel prices has been boosted by the news of partial closures of Philippine mines, but the short-term closure of mines is not the fundamental driving force for price increases. In November, the downstream gradually entered the off-season. Coupled with the impact of the epidemic, it is expected that the short-term nickel price will remain volatile and weak.
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