Trading of nickel remains weak amid falling price

Date 12/6/2018 5:01:49 PM Source: SHMET

SHANGHAI, Dec 6 (SHMET) – A strengthened US dollar and market concerns on China’s economic growth continued to hit base metals markets. Nickel market would remain weak in the short term. Trading of nickel was thin on December 6. Nickel market caution gradually strengthened, as nickel futures moved from up to down. Though some downstream plants purchased as required, many market players chose to stand on sidelines, waiting for nickel price to drop further.

Spot nickel was offered at 90,400-98,500 yuan/mt on Thursday, down 550 yuan/mt. Jinchuan nickel was quoted at a premium of 7,800 yuan/mt over Wuxi 1812 nickel contract, and 7,920 yuan/mt over SHFE 1901 nickel. Russian nickel was offered at a discount of 300 yuan/mt over Wuxi 1812 nickel contract and at a discount of 180 yuan/mt over SHFE 1901 nickel.

In the NPI market, offers for Ni 8-12% NPI were at 955-985 yuan/mtu, and 950-970 yuan/mtu for Ni 7-10% NPI, unchanged from a day earlier.

The NPI market was quiet recently. Market’s pessimism on demand suppressed NPI price. Besides, non-decreased inventory given the later-release new NPI capacity would also drag down the price. For the downstream stainless-steel market, the overall enduring weak demand repressed steel price recently. Some steel factories chose to suspend production or reduce output, which boosted steel price to certain extent. However, bearish sentiment still existed in the market for a short term. Furthermore, midstream traders reflected that while purchase from steel plants had improved a bit, most plants expected the price to reduce further and would stay aside when nickel price rebounded.

For the macro side, US dollar strengthened, as the market expected that the Fed would raise interest rate again. As a result, base metals markets were repressed yesterday night as a result. The market focuses on the non-farm payroll report due to be released this Friday, indicating market players’ concerns about the strength of US economic development. A strong economic data would encourage Fed to be more active in raising interest rate, which could weigh on base metals markets. LME nickel shocked downward with a lower level support at $11,000/mt.

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