Price trend
According to the monitoring of nickel prices by SunSirs, nickel prices slightly declined this week. As of May 12th, the spot nickel quotation was 177,350 RMB/ton, a decrease of 8% from the beginning of the week and a year-on-year decrease of 18.37%.
According to the weekly rise and fall chart of SunSirs, nickel prices rose in 5 weeks and fell in 7 weeks in the past 12 weeks. Recently, nickel prices fell weakly.
Analysis review
On a macro level, the International Monetary Fund had stated that if the United States defaults on its debt, it would have a very serious negative impact on the US and global economy. Biden was originally scheduled to postpone negotiations on the debt ceiling with House Speaker McCarthy on Friday until next week. Federal Reserve hawkish official Kalikash stated that despite a short-term slowdown, inflation remained too high, and the Federal Reserve would have to maintain a tightening monetary policy for a longer period of time. The Bank of England announced a 25 basis point hike in its benchmark interest rate to 4.5% and stated that further tightening of monetary policy was necessary if there was more holding pressure on inflation.
In terms of supply: Recently, long-term agreement orders for Russian nickel have been arriving one after another, coupled with an increase in the output of domestic electrowinning nickel projects. This Wednesday, the 20,000 ton refined nickel and 80,000 ton nickel sulfate projects of Huayou Quzhou project began to be put into operation, and the global low inventory pattern of pure nickel may be difficult to continue. In terms of secondary nickel, Indonesia's newly invested production capacity had been released, and nickel iron continued to flow back, thus impacting the domestic market.
In terms of demand: The weak real estate sector has led to a decrease in stainless steel production. The demand for new energy vehicles also fell short of expectations. Although the production and sales of new energy vehicles in China still maintain year-on-year growth, the production capacity of battery grade nickel sulfate has shown signs of excess. In addition, the relative advantage of lithium iron phosphate battery in price has reduced the demand for nickel.
Market outlook
In summary, macro data performance was poor, with fundamental nickel prices plummeting but downstream consumption not actively purchasing on dips. The increase in nickel element supply was exerting significant pressure on nickel prices. It is expected that nickel prices will remain weak in the short term.
