SHANGHAI, Jun 21 (SMM) - On the supply side, after the delivery of SHFE 2206 contract, the delivered nickel plates have been circulating in the market. Spot pure nickel imports remained profitable and some seaborne nickel plates have arrived. In terms of NPI, according to the import data in May, imports of Indonesia NPI grew rapidly, and the arrivals in China have also continued to nibble the market share of domestic NPI, resulting in constant supply surplus. On the demand side, in terms of stainless steel, a trader has traded more than 10,000 mt of goods with a steel mill, reducing the inventory pressure on this steel mill, which also made the market wonder whether the short-term prices have bottomed. And also because of this news, the market transactions picked up slightly. The supply continued to fall, while the demand side recovered to some extent. In terms of alloy, due to the sharp increase in the purchase volume on rigid demand last week, the overall transactions were weak at the beginning of this week. Nonetheless, the downstream still carries rigid demand. To sum up, there is currently no major changes in the supply and demand of pure nickel. The market should continue to pay attention to the bearish impact of macro factors on nickel prices. It is expected that nickel prices will maintain keep falling in the near term. 

Pure nickel: In the spot market, Jinchuan nickel was quoted at premiums of 12,000-13,000 yuan/mt as of June 20, with an average of 12,500 yuan/mt, up 1,000 yuan/mt from a day ago. NORNICKEL nickel was quoted at 5,500-6,000 yuan/mt, with an average price of 5,700 yuan/mt, down 250 yuan/mt from a day ago. The premiums of Jinchuan and NORNICKEL nickel both dropped, mainly because the supply tightness eased after the recently delivered sources entered the market and the expected arrival of NORNICKEL nickel in the following few days.

In terms of nickel briquette, the prices were 198,000-198,700 yuan/mt, which was 850 yuan/mt lower than a day ago. The prices dropped along with falling futures prices, and the cost efficiency of producing nickel sulphate with briquette was also poorer than intermediates. Coupled with the fact that the mainstream raw material for alloy is mainly nickel plate, the transactions of nickel briquette were extremely scarce.

NPI: As of June 20, SMM high-grade NPI was 1,450 yuan/mtu (ex-factory, tax included) on average, flat from the last trading day. Though NPI prices changed little, the downward trend has not yet stopped, and the prices are still subject to the stainless steel dynamics. On the supply side, NPI prices still gained cost support as the prices of auxiliary materials stood high despite falling nickel ore prices. However, the weakening downstream demand and the increase in the supply of NPI made it difficult for NPI prices to stay firm.

According to the import data in May, imports of Indonesia NPI grew rapidly, and the arrivals in China have also continued to nibble the market share of domestic NPI, resulting in constant supply surplus. As the stainless steel market has not improved yet and the stainless steel inventory kept rising, steel mills were cautious in purchasing raw materials and less interest in producing. NPI prices are expected to remain volatile with some downward risks. 

Stainless steel: Spot prices in Wuxi and Foshan cities showed signs of rebound yesterday. The prices of 304 stainless steel stood between 17,900-18,200 yuan/mt, but market quotations were chaotic; while hot-rolled coil prices also rebounded to a level of 17,900 yuan/mt. The stainless steel futures prices also showed a relatively strong rebound, and the price difference between the futures and spots narrowed further. Though the market prices rose along with futures prices, some were still unclear about the actual causes, and stayed cautious concerning the market outlook.

According to SMM research, although a large steel mill resumed the production at the beginning of the month, now it was shut down again. On the demand side, a trader has traded more than 10,000 mt of stainless steel with a steel mill, reducing the inventory pressure on this mill, which also made the market wonder whether the short-term prices have bottomed. And also because of this news, the market transactions picked up slightly. The supply continued to fall, while the demand side recovered to some extent. On the cost side, although the prices of NPI are now close to the cost line, there is still possibility that nickel ore prices will fall, hence it is expected that NPI prices may drop further. The overall cost is still moving down.

The prices of 304 cold-rolled coils moved between 18200-18800 yuan/mt, and the prices of 304 hot-rolled coils were between 17900-18400 yuan/mt. 316L/2B was reported at 30,300-30,600 yuan/mt in morning trade. As of 10:30 am (Beijing time), the SHFE SS 2207 contract stood at 17890 yuan/mt, and the spot premiums in Wuxi were 480-1080 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt).