Russia - Ukraine War Nickel Price From Fundamental Fluctuations

Iron and nickel: During the week, the price of iron and nickel remained between 1600-1630 yuan/nickel point, the profit reached 200-485 yuan/nickel point, the profit margin reached 30%.

High nickel matte: High nickel matte capacity release has not yet reached the magnitude of alleviating the nickel supply gap, which needs to be replenished by capacity release from Indonesia or pure nickel supply from overseas.

Stainless steel: affected by nickel iron, pure nickel and other raw material prices, stainless steel cost center rising, some steel mills into the deficit stage. The current stainless steel fundamentals are weak, pay attention to the inventory changes, need to guard against the negative feedback of stainless steel upward transmission.

Inventories: As of March 8, LME nickel inventories were depleted to 75,012 tonnes, including 55,386 tonnes of nickel beans and 14,994 tonnes of nickel plates. As of March 4, domestic nickel social inventory was slightly depleted to 12,440 tons, still at a historical low.

The core idea

The Russia-Ukraine war exploded the market and Lenni was unstoppable. In the short term, the logic of tight overseas nickel supply remains unchanged, and LME nickel inventories will continue to be destocked.

At present, there is no specific sanctions against Russian nickel provisions, only Russian nickel to Europe's transport route facing obstacles. Import deficit of 130,000 yuan/ton, China import Russian nickel window has not yet opened.

If Russian nickel exports to Europe and other places are blocked in the future, and Russian nickel can enter China at a lower price, such as the settlement price of the previous period, the pattern of external strength and internal weakness will be further highlighted, and price comparison regression will not be driven enough.

If Russian nickel is still priced by LME settlement, it will not be competitive in the domestic market. Moreover, pure nickel from overseas will still be imported as a supplement, aggravating the tight situation of overseas nickel supply.

Nickel market volatility out of the fundamentals, the price difference widened, the market needs to return to the rational, waiting for lun nickel to resume trading, Shanghai nickel opened after the trading limit, alert Lun nickel, Shanghai nickel callback risk, it is recommended to wait-and-see strategy.