The contradiction between supply and demand is difficult to digest, and the momentum for nickel pric

2020-07-07 15:47

Since the second quarter, the nickel market has been turbulent, and the main 1907 contract price of Shanghai nickel futures has been operating in the range of 94280-104030 yuan/ton. Analysts said that the current contradiction between supply and demand in the nickel market is still difficult to digest, and nickel prices do not have the opportunity to trend upward, and the macro-level uncertainty will also make it difficult for non-ferrous metals to get rid of the shock pattern.


  The ups and downs of futures prices


  Since April, the trend of Shanghai nickel futures has been ups and downs. The main 1907 contract once set a new high of 104,030 yuan/ton on April 4, and then came under pressure all the way down. On May 10, it set a new low of 94540 yuan/ton, and it went up all the way. It fell again after the high point of 102830 yuan/ton on May 24, and fell to 94280 yuan/ton again on June 6, and then rebounded. As of last Friday, it closed at 10,060 yuan/ton. The cumulative increase and decrease since the second quarter has been almost Flat.


  "At the beginning of April, due to the easing of domestic nickel-iron supply expectations, high social inventories of stainless steel, and continued weakness in terminal demand, the focus of nickel prices continued to move downward. At the end of May, the fluctuation of nickel prices intensified, and domestic refined nickel inventories remained low for a long time. The nickel premium has narrowed sharply, and the high production of stainless steel corresponding to the demand for primary nickel remains stable." said Che Hongyun, leader of the non-ferrous group of SDIC Anxin Futures, and Xin Weihua, a mid-level analyst.


  New Era Futures analysts said that the recent floods in Indonesia once again affected market sentiment. Indonesia's supply concerns triggered a rebound in nickel prices. However, this factor only affects the short-term rhythm and does not change the central bearish trend. The greatest pressure on new capacity will be after the fourth quarter, and the third quarter may be supported by Indonesia's Delong stainless steel production and the traditional peak consumption season of "Golden Nine Silver Ten", so it is not the most pessimistic time for now.


  The short-term trend may be repeated


   It is worth mentioning that the two rounds of rebound in nickel prices in the second quarter were basically accompanied by market noise. Che Hongyun and Xin Weihua said that they mainly include a series of factors such as the general election turmoil in Indonesia, the floods in Sulawesi, and the review of Indonesian nickel mines, but their actual boost to nickel prices is very limited, and the fundamentals of the nickel market have not changed significantly. First of all, from the perspective of refined nickel supply links, this year's global and China's refined nickel output is expected to increase slightly. Since the end of April, the domestic refined nickel import window has opened, and the import profit has expanded to above 2,000 yuan in the past two days, and the domestic refined nickel inventory warehouse receipts have begun to rebound significantly. Taking into account the continuous increase in imported goods, the logic of nickel market squeeze is bound to be difficult to last. because


   From the perspective of the stainless steel sector, after the nickel price rebounded, the price of high nickel iron and stainless steel did not follow up, and the market performed more rationally. At present, domestic mainstream steel mills have announced that the purchase price of high-nickel iron is mostly between 930-940 yuan/nickel point, which is a deep discount to the price of refined nickel. In fact, the cost focus of steel mills is also shifting downwards. The state-owned steel mills are currently profitable, and the steel mills’ demand for primary nickel remains stable. Therefore, the destocking of the stainless steel market is difficult to continue in the context of the high output of steel mills.


   Regarding the market outlook, Che Hongyun and Xin Weihua said that they still need to focus on the supply and demand of primary nickel. First of all, the increase in the supply of ferronickel has basically become a market consensus. The domestic production of primary nickel this year may increase by 17.7% year-on-year to 805,000 tons. Secondly, the destocking process of refined nickel at home and abroad has slowed down significantly, and domestic refined nickel supply is expected to rebound significantly after the opening of the import window. In the context of a constant increase in supply, changes on the consumer side will continue to affect the trend of nickel prices in the later period. At present, the output of stainless steel is basically stable, the inventory is high, and the current situation of sluggish consumption is difficult to change. Stainless steel prices may have room for further decline.


  New Era Futures analysts said that in the short term, high stainless steel inventories may eventually drag down nickel demand. The slow recovery of domestic refined nickel inventories and the continued decline in ferronickel prices indicate that supply pressure is gradually emerging. However, the recent floods in Indonesia have caused supply concerns and the current inventory is still low. Although nickel prices are bearish in the mid-term, short-term trends may continue to repeat. Generally speaking, non-ferrous metals are still in the macro market. Before the international trade situation is clear, the uncertainty of the market makes it difficult for non-ferrous metals to get rid of the shock pattern.