Nickel Prices Fall After Record High Market Rekindled Oversupply Expectations

January 5, Shanghai nickel futures main contract opened at 226900 yuan/ton, today's highest intraday hit 226900 yuan/ton, the lowest probe 221580 yuan/ton; Up to now, Shanghai nickel main drop more than 4%.

Nickel futures on the London Metal Exchange closed 6.81 per cent lower yesterday, opening at $31,000 a tonne and hitting an intraday high of $31,000 before dipping below $29,200 to close at $29,200.

Institutional view:

Copper crown gold source futures believe that supply and demand, the supply end of the Jinchuan factory price spot discount fell for days, refined nickel spot traders also followed the cut spot discount to promote shipments, spot discount rose yesterday after the month, immediately fell sharply today, the import window also keep closed supply. Demand end stainless steel terminal demand is relatively weak, the stainless steel market into the Spring Festival continuous accumulation stage, steel mills in the market high offer nickel iron resources acceptance is limited, the market to fake strong atmosphere. Nickel fundamentals of supply and demand are weak, vigilant nickel prices fall.

Galaxy Futures analysis pointed out that Qingshan and Green Beauty joint electrodeposition nickel project production news, rekindled market expectations of nickel oversupply. Although electrodeposited nickel can approximately replace part of electrolytic nickel, it still cannot be delivered. At present, there is no shortage of raw materials for electrolytic nickel production in China, but due to insufficient capacity, production cannot be released in the short term. Other new electrolytic nickel projects are expected to be put into production within this year, which is relatively negative for the forward nickel price. Pure nickel downstream stock is coming to an end, next week many enterprises have entered the state of holiday, nickel prices hit a new high after the resistance to fall, capital is also a sign of profit-taking, before the holiday may continue to pressure downward return to December 19 low near to find support, but still need to be vigilant about the impact of insufficient delivery products on the disk.

Zhongyuan Futures said that on the supply side, the Philippines is in the rainy season, increasing the difficulty of mine shipment, pure nickel imports are still in the state of loss, and the domestic pure nickel spot continues to be tight. Spot premium continues to be high; The main base difference of Shanghai nickel is 10780 yuan/ton and the base difference rate is 4.70%. On the demand side, electric vehicles and infrastructure in the United States, Europe and other developed markets will drive gradual growth in demand. The use of nickel in electric vehicle batteries is also growing fast, reaching nearly 15 percent of the total this year, and is expected to reach 20 percent by 2025 and nearly 35 percent by 2030. The new energy power market is strong, supporting demand. Stainless steel manufacturers consume two-thirds of the world's nickel supply, financial support real estate 16 more stainless steel, stainless steel sector nickel demand for the long-term improvement.