Nickel Price Stays in Consolidation

SHFE nickel expanded its losses on October 21, with a significant short squeeze. The spot quotes also lowered down sharply, and cargo holders were eager to sell. Sources said that many market players sold Russian nickel and bought Wuxi nickel; however, the trading was light. Sources said that quotes for nickel briquette were at a discount of 3,000-2,500 yuan/mt against SHFE 1911 nickel contract, though some quoted at discounts of more than 4,000 yuan/mt.

Spot nickel was offered at 128,150-128,550 yuan/mt on October 21, down 2,500 yuan/mt. Jinchuan nickel was quoted at a premium of 9,950 yuan/mt over Wuxi 1911 nickel contract and a premium of 600 yuan/mt over SHFE 1911 nickel. Russian nickel was offered at a premium of 9,550 yuan/mt over Wuxi 1911 nickel contract and at a premium of 200 yuan/mt over SHFE 1911 nickel.

Market sentiment became cautious as NPI price fell recently. Though some people were eager to sell, the market demand was thin. The falling nickel and NPI prices weighed on downstream stainless steel market. Sources said that quotes for some series of steel lowered down. Steel trading volume obviously declined, as terminal demand was suppressed by weakened stainless steel market.

In the NPI market, offers for Ni 8-12% NPI were at 1,180-1,210 yuan/mtu, and 1,170-1,200 yuan/mtu for Ni 7-10% NPI, unchanged from previous trading day.

For the macro side, the positive real estate and infrastructure brought bullish sentiment to market. Industrial base metals’ prices were mixed, and nickel price continued to be stuck in range bound. LME nickel fluctuated with a weak tone, looking for support at $16,000/mt.

Overall, nickel price will continue to consolidate in the short run, amid weak demand, digested positive sentiment and weaker funds. 

Whether SHFE 3M nickel could get support at 50% of the Fibonacci callback shall be a market focus.