1、 Trend analysis
This week, nickel prices have shown a “V” shaped trend. As of the weekend, the spot nickel price was 125866.67 yuan/ton, a decrease of 0.32% from the beginning of the week and a year-on-year increase of 2.32%.
Macroscopically, this week the Federal Reserve raised interest rates by 25bp as scheduled to 3.75% -4.00%, with a bearish candlestick chart and the US dollar index returning to above 100%. However, the sentiment of “all bearish sentiment” dominated, and basic metals generally rose. The marginal suppression of nickel prices on a macro level has weakened.
In terms of raw materials, the new HPM policy in Indonesia has been implemented, and the correction factor for low-grade wet ore has been reduced by about 45%. The new HPM for 1.2% nickel ore has dropped to $24.89 per wet ton, which is lower than the actual factory price, and the cost support for the mining end has been lowered. The supply of nickel ore in the Philippines has reached its peak, and port inventories have rebounded. The transaction price of nickel iron has fallen to 1070-1085 yuan/nickel, and the overall operation of the raw material side is weak.
On the supply side: Indonesia’s WBN has received new quotas from RKAB, strengthening expectations of loose supply, but ESDM denies approval news, and policy uncertainty still exists. El Ni ñ o drought poses a 30% -40% reduction risk for the wet process project in IMIP park, and a certain HPAL project plans to reduce production by about 30% in September. Domestic refined nickel losses and production cuts are accelerating, and the supply side is intertwined with long and short positions.
In terms of demand, the quality of the “Golden September” peak season is insufficient, and the inventory of stainless steel 300 series has risen to 590900 tons. Steel mills mainly purchase for essential needs, and no large-scale replenishment has been seen. Top battery cell manufacturers in the new energy sector have lowered orders, while lithium iron phosphate continues to occupy the market share of ternary batteries. Nickel sulfate procurement is mainly based on long-term agreements, with few individual orders, and both demand engines are weak at the same time.
Influencing factors: The core variables are the pace of RKAB quota approval in Indonesia and the actual implementation of HPM new policies, with the policy aspect becoming the main driver of short-term nickel prices. At the same time, attention should be paid to the linkage impact of the Fed’s subsequent interest rate hike path on the US dollar and non-ferrous sectors, as well as whether the demand for stainless steel during the peak season can show marginal improvement in late September.
In summary, the macro bearish phase provides a rebound window, but the expectation of loose supply and high inventory (LME 279000 tons) suppress the upper space, and there is support from smelting costs below. It is expected that nickel prices will maintain a range bound fluctuation trend in the short term.
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