SHANGHAI, Mar 6 (SMM) - Nickel prices trended lower on frequently released news factors last week. On March 2, the news said that NORNICKEL Nickel, the largest nickel producer in Russia, shipped goods to China in RMB. The spots were priced based on the mixed price of SHFE and LME nickel. Nickel futures prices fluctuated greatly.
The pricing method of NORNICKEL Nickel was conducive to nickel prices returning to fundamentals. New pure nickel capacity has yet to be released, and it is expected that the output will climb in March. Besides, the pricing method of NORNICKEL Nickel dragged nickel prices down to fundamentals, and the SHFE/LME nickel price ratio gradually tends to normal.
Therefore, it is expected that the import window will remain open in March. On the demand side, although the stainless steel market is expected to improve, the proportion of pure nickel consumption has dropped to 2.5%, which cannot offer strong support to pure nickel prices. Pure nickel consumption by alloy manufacturers is expected to rise in the second quarter of 2023.
However, in the short term, the pure nickel consumption in March can hardly increase compared with that in February since alloy companies get poor orders amid the decline in commodity prices. In 2023, the pure nickel supply will be sufficient. The supply surplus of pure nickel in March will be smaller than that in February. Therefore, it is expected that nickel prices will show a downward trend in March. The price difference between nickel sulphate and electrowinning nickel has dropped to 8,059 yuan/mt based on nickel prices last Friday, which almost suppressed the profit margins gained by electrowinning nickel companies to 0 yuan/mt. And some even cut their production amid losses.
In addition, downstream demand has picked up amid the fall in nickel prices, which will limit the downward space of nickel prices in the short term.
Source:SMM
