Nickel companies switch to nickel sulfate -Lithium - Ion Battery Equipment
Recently, the fundamentals of nickel have weakened. The market is worried that the opening of the import window will weaken the support of low inventories for nickel prices, superimposing the risk of accumulation of downstream stainless steel, and nickel prices will face adjustment pressure in the short term. However, the fundamentals of the nickel market are still solid. Driven by the structural shortage of supply and the demand for new batteries, the bullish pattern of nickel prices remains unchanged. Therefore, a short-term callback will bring a better opportunity to enter the market, and the operation is mainly to buy on dips.(Lithium - Ion Battery Equipment)
Fundamental drivers remain
From the perspective of global supply and demand balance, nickel has been in shortage for three years, and the logic of long-term strengthening of nickel prices has not changed. According to the latest data from the International Nickel Research Organization, the supply gap in the global nickel market expanded to 15,400 tons in May, with consumption hitting the highest level in the year. From January to May this year, the global nickel market supply shortage expanded to 69,600 tons, which was higher than the 50,100-ton supply-demand gap in the same period last year. Under the expectation of better demand for new energy vehicles, nickel companies have switched to nickel sulfate and squeezed the output of electrolytic nickel. The structural shortage of nickel market and the demand for new batteries are the fundamental driving forces supporting the long-term trend of nickel prices.
In the short term, the Sino-US trade friction will still be a disturbing factor. Although the nickel price has realized the macro risk after the boots landed, the marginal negative effect of this factor on non-ferrous metals has weakened in the later stage, but it cannot be ruled out that it will form a long-term suppression of market confidence. Put the colored plate under pressure.
In terms of fundamentals, the support of environmental protection for high-nickel iron has weakened, but high-nickel iron shows strong resilience. At the beginning of July, some high-nickel iron plants in Jiangsu and Inner Mongolia began to resume production. The important thing was to complete the pre-orders, and there were few circulatable supplies, and the price of high-nickel iron showed obvious resilience. However, environmental protection has limited support for high-nickel iron, and it is difficult to see a situation similar to last year's Shandong production cut driving nickel prices soaring.
The road up will not be smooth sailing
Although the strong pattern of nickel prices has not changed, the rising process of nickel prices is more tortuous, and the fundamentals are under short-term bearish pressure.
First of all, after the import profit and loss are opened in these two weeks, the inventory change will become the key. The stock of nickel on the Shanghai Futures Exchange has continued to decline since the second half of 2016, and the current stock is less than 30,000 tons. Among them, the nickel inventory of Shanghai Futures Exchange decreased by nearly 75% compared with the inventory of 90,000 tons at the beginning of last year, and compared with the peak of 110,000 tons in 2016, a decrease of 79%. After a lapse of half a year, the profit window of nickel imports has reopened. Since the current inventory of nickel plates in the bonded area is more than 60,000 tons, the market is worried that the inflow of nickel plates driven by customs declaration will weaken the support for nickel prices from low inventories. In fact, there are indeed signs of inflow of Russian nickel in the spot market. The most intuitive one is that the price difference between Jinchuan nickel and Russian nickel has continued to widen to 925 yuan/ton.
Secondly, the risk of downstream stainless steel accumulation drags down the performance of nickel prices. In mid-May, with the rumors that environmental protection had severely cracked down on steel plant maintenance, stainless steel began the process of destocking, but it was only one month after destocking, and the risk of accumulating inventory early appeared. As of early July, the total stainless steel inventory in Wuxi and Foshan increased by 5.47% to 347,800 tons. Recently, major steel mills have begun to focus on maintenance and production reduction. Steel mills including Zhangjiagang Pohang, Beihai Chengde, and Jinhai have been scheduled for maintenance one after another. The risk of accumulating stainless steel may be improved in the future.
Fundamental drivers remain
From the perspective of global supply and demand balance, nickel has been in shortage for three years, and the logic of long-term strengthening of nickel prices has not changed. According to the latest data from the International Nickel Research Organization, the supply gap in the global nickel market expanded to 15,400 tons in May, with consumption hitting the highest level in the year. From January to May this year, the global nickel market supply shortage expanded to 69,600 tons, which was higher than the 50,100-ton supply-demand gap in the same period last year. Under the expectation of better demand for new energy vehicles, nickel companies have switched to nickel sulfate and squeezed the output of electrolytic nickel. The structural shortage of nickel market and the demand for new batteries are the fundamental driving forces supporting the long-term trend of nickel prices.
In the short term, the Sino-US trade friction will still be a disturbing factor. Although the nickel price has realized the macro risk after the boots landed, the marginal negative effect of this factor on non-ferrous metals has weakened in the later stage, but it cannot be ruled out that it will form a long-term suppression of market confidence. Put the colored plate under pressure.
In terms of fundamentals, the support of environmental protection for high-nickel iron has weakened, but high-nickel iron shows strong resilience. At the beginning of July, some high-nickel iron plants in Jiangsu and Inner Mongolia began to resume production. The important thing was to complete the pre-orders, and there were few circulatable supplies, and the price of high-nickel iron showed obvious resilience. However, environmental protection has limited support for high-nickel iron, and it is difficult to see a situation similar to last year's Shandong production cut driving nickel prices soaring.
The road up will not be smooth sailing
Although the strong pattern of nickel prices has not changed, the rising process of nickel prices is more tortuous, and the fundamentals are under short-term bearish pressure.
First of all, after the import profit and loss are opened in these two weeks, the inventory change will become the key. The stock of nickel on the Shanghai Futures Exchange has continued to decline since the second half of 2016, and the current stock is less than 30,000 tons. Among them, the nickel inventory of Shanghai Futures Exchange decreased by nearly 75% compared with the inventory of 90,000 tons at the beginning of last year, and compared with the peak of 110,000 tons in 2016, a decrease of 79%. After a lapse of half a year, the profit window of nickel imports has reopened. Since the current inventory of nickel plates in the bonded area is more than 60,000 tons, the market is worried that the inflow of nickel plates driven by customs declaration will weaken the support for nickel prices from low inventories. In fact, there are indeed signs of inflow of Russian nickel in the spot market. The most intuitive one is that the price difference between Jinchuan nickel and Russian nickel has continued to widen to 925 yuan/ton.
Secondly, the risk of downstream stainless steel accumulation drags down the performance of nickel prices. In mid-May, with the rumors that environmental protection had severely cracked down on steel plant maintenance, stainless steel began the process of destocking, but it was only one month after destocking, and the risk of accumulating inventory early appeared. As of early July, the total stainless steel inventory in Wuxi and Foshan increased by 5.47% to 347,800 tons. Recently, major steel mills have begun to focus on maintenance and production reduction. Steel mills including Zhangjiagang Pohang, Beihai Chengde, and Jinhai have been scheduled for maintenance one after another. The risk of accumulating stainless steel may be improved in the future.
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