SMM Nickel Market Morning Comment

Dec 23, 2024 09:30   Source:SMM

Last week, nickel prices fluctuated, with the spot prices at 122,000-131,000 yuan/mt and SHFE nickel at 121,000-129,000 yuan/mt. During the week, under the combined influence of the US Fed's economic policies and the decline in premiums for nickel ore, nickel prices continued to fall steadily.

In the spot market: Last week, the continued decline in nickel prices, coupled with a slight tightening of domestic spot supply, drove up the spot premiums for some domestic brand refined nickel during the week. If nickel prices continue to decline, spot premiums may remain high and stable in the short term.

The China nickel market is a significant player in the global nickel landscape. Here's a breakdown of key aspects:  

Key Factors:

●Demand:

◆Stainless Steel: China is the world's largest stainless steel producer, driving substantial nickel demand.

Electric Vehicles (EVs): The booming EV industry significantly boosts demand for nickel used in lithium-ion batteries.  

◆Other Applications: Nickel finds use in various industries, including alloy production, chemical processing, and electroplating.

●Supply:

◆Domestic Production: China has domestic nickel resources but relies heavily on imports.

◆Imports: A significant portion of China's nickel supply comes from Indonesia, the Philippines, and other countries.  

◆New Projects: Investments in new nickel projects, particularly those focused on battery-grade nickel, are crucial for meeting growing demand.

●Price Fluctuations:

◆Global Market Dynamics: Global economic conditions, geopolitical events, and supply-demand imbalances significantly impact nickel prices.  

◆Government Policies: Chinese government policies, such as environmental regulations and trade policies, can influence the market.

◆Technological Advancements: Technological advancements in battery production and recycling can impact nickel demand and prices.

●Current Trends:

• Focus on Battery-Grade Nickel:With the rapid growth of the EV market, there's a strong focus on increasing the production of high-purity nickel sulfate, a key raw material for lithium-ion batteries.
• Supply Chain Diversification:China is seeking to diversify its nickel supply sources to reduce reliance on specific countries.
• Technological Innovation: Research and development efforts are underway to improve nickel extraction and refining technologies to enhance efficiency and reduce environmental impact.  

Challenges:

• Ensuring Sustainable Supply:Balancing environmental concerns with the need for increased nickel production is a major challenge.
• Price Volatility:Maintaining stable and predictable nickel prices is crucial for the long-term health of the industry.
• Competition:Intense competition from other countries in the EV and battery market presents challenges for China.

Disclaimer: This is a general overview and should not be considered financial advice.

For a more in-depth analysis, expert recommends consulting:

• Industry reports from reputable sources:These reports often provide detailed market analysis, forecasts, and insights.  
• Financial news publications:Keep up-to-date with the latest news and developments in the nickel market through financial news sources.
• Government and industry association publications:These organizations often publish data and reports related to the nickel market.