SunSirs: Sep 5

Ruida Futures: NI has a large correction and the lower support line should be concerned

Foreign and domestic trend: On Thursday, NID continues to rise and has a large correction. At 15:05 (Beijing Time), the price of NID for 3 months is 17,685USD/t, the daily decline rate is 2.24%. NI1911 has a large correction, the highest price today is 147,780RMB/t, the lowest one is 141,510RMB/t, the closing price is 142,880RMB/t which is 2.70% less than that of yesterday. 196.98 lots are traded, which increases 328,000 lots; Open interest is 402,500 lots, decreases 7,860 lots. The basis is -380RMB/t; The monthly price gap between NI1910 and NI1911 has narrowed to -210RMB/t.  

Market focus: (1) The leaders of high-level China-US Economic and Trade Consultations had a conversation, the two sides agreed to hold the thirteenth round of high-level consultation in Washington in early October. (2) The British Parliament passed a bill to prevent Britain from falling out of the EU without a divorce deal, Johnson's motion for an early election was rejected. (3) The United States imported 6,354.24 tons of unwrought non-alloy nickel in July, it was less than that of June (7,354.71 tons); In the first seven months of this year, the cumulative import volume was 560,000 tons.

Spot analysis: On Sep 5, the spot price of 1# electrolytic nickel is 142,200-142,800RMB/t, the average price is 142,500RMB/t, it drops 2950RMB/t one day. According to SMM, in the morning trading, NI dropped sharply from 147,600 to 142,000, which means to a consolidation. The purchasing of the downstream has been boosted, and the drop has released continuous demands. Jinchuan nickel is slightly better than Russian nickel. During the second trading period, the price of nickel rebounded slightly, spot trade was slightly cold, downstream emotion was temporarily cold.

Warehouse warrant and stock: On Thursday, the warehouse receipt is 20,609 tons in total, increasing 5,597 tons daily; On Sep 4, the stock of NID was 153,522 tons, increasing 510 tons daily.

SVZL: NI1910’s long position of the top 20 is 145,429 lots, decreasing 4,181 lots one day. The short position is 135,959 lots, decreasing 2,029 lots one day. The net long position is 9,470 lots, decreasing 2,152 lots one day.

Market study and determine: NI has a large correction on Sep 5. The high-level leaders of China and US have determined the date for the next consultation, the optimistic attitudes towards the market revived. The pound has recovered and the re-warm expectation of Federal Reserve’s rate cut which

weighing on the US currency. All of these are good news to the nickel’s price. Meanwhile, the concerns about the tight nickel supply still persist, supporting the operation at the high price. However, the downstream demand of stainless steel remains weak, the inventory is high, forming partial pressure on nickel’s price. When it comes to the spot, in the morning trading, NI dropped to 142,000, which means to a consolidation. The purchasing of the downstream has been boosted, and the drop has released continuous demands. During the second trading period, the price of nickel rebounded slightly, spot trade was slightly cold, downstream emotion was temporarily cold. Technically, NI1911’s MACD shortened, the support line of 138,000 should be concerned, and it is expected to swing at low positions for a short term. Operationally, it is suggested that NI1911 should be bought in small quantities at low prices and the stop loss price could be 138,000RMB/t.

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