Price trend
According to the nickel price monitoring by SunSirs, nickel prices rose slightly last week. As of the end of the week, the spot nickel price was 149,416 RMB/ton, an increase of 2.05% compared to the beginning of the week and a year-on-year increase of 18.96%.
According to the weekly price fluctuation chart from SunSirs, over the past 12 weeks, nickel prices have fallen for 4 weeks and risen for 8 weeks, with recent nickel prices mainly fluctuating at high levels.
Market analysis
Macroeconomic perspective: U.S. employment and inflation continued to slow, but some sectors had improved due to the boost from the Federal Reserve's interest rate cuts. The Federal Reserve remains divided on how to weigh employment against inflation targets in the future and is likely to remain cautious in the short term.
Supply side: The impact of production cuts has weakened, leading to an increase in refined nickel production, and overall market supply of spot goods was relatively abundant. In December, China's refined nickel production was 31,400 tons, a month-on-month increase of 21.7%.
Demand side: Overall demand from the electroplating downstream sector remained relatively stable, with little prospect of future growth; alloy demand still accounts for the majority, with strong demand from the military and shipbuilding industries. Stainless steel demand is average, and social inventories are being depleted slowly. Improved profitability for steel mills may increase supply pressure, and spot market transactions remain cautious. Regarding nickel sulfate, after the peak season inventory build-up, downstream ternary battery production has slightly declined. New production capacity coming online in the medium term will also be a limiting factor, and prices have recently fallen.
Market outlook
In summary, the increase in stainless steel production and the positive outlook for new energy battery materials demand, coupled with potential disruptions to overseas supply, and the increased risk appetite driven by the rebound in US stocks, have further boosted prices. However, the pressure from high global nickel inventories remains, limiting the upside potential, resulting in a volatile upward trend in nickel prices. Nickel prices are expected to maintain a generally stronger but volatile trend.
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