Latest Update in the China Nickel Market

China’s copper cathode output shrank in July as some smelters conducted maintenance to deal with shortage of copper concentrate.

SHFE nonferrous metals, except for copper, cruised higher on Friday August 7, but ferrous metals all declined.

Nickel ore inventories across all Chinese ports declined 154,000 wmt from Aug 31 to 8.19 million wmt as of July 31, showed SMM data.

Inventories of refined nickel in the Shanghai bonded areas remained unchanged from a week ago of 18,300 mt including 16,600 mt nickel plate as of July 31, showed SMM data.

The following table shows the ferrous and nonferrous metals movement on the SHFE and DCE on August 7, 2020

There is a sharp rise in nickel prices recently due to capital factors as the short term fundamentals of nickel pig iron (NPI) and stainless steel exceeded expectations, boosting the spot prices of related products. On the other hand, Indonesian NPI resources are eroding the share of the domestic NPI market. The SMM nickel team gives a near term outlook on the NPI market.

China’s NPI output fell 3% from June and 14.74% from a year earlier to 43,200 mt (Ni content) in July. This included 36,000 mt (Ni content) of high-grade NPI, down 3.87% on month, and 7,200 mt (Ni content) of low-grade NPI, up 1.56% month on month.

SMM data showed that China produced 52,300 mt of nickel sulphate in July, or 11,500 mt in nickel content, up 16.35% from June and 2.8% from a year ago. This included 45,200 mt of battery-grade nickel sulphate and 7,100 mt of electroplating-grade nickel sulphate.