Trend analysis

According to the monitoring of nickel prices by Shengyi Society, nickel prices fluctuated downward again this week (8.10-8.16) and continued to weaken. As of the weekend, spot nickel was reported at 129683 yuan/ton, a weekly decrease of 1.51% and a year-on-year decrease of 14.35%.

Macroscopically, the US PPI in July increased by 2.2% year-on-year, with an estimated 2.3%, compared to the previous value of 2.6%. The consumer survey report released by the Federal Reserve shows that US consumers’ one-year and five-year inflation expectations remained stable in July, while three-year inflation expectations fell sharply, reaching the lowest 2.3% since records began in 2013. Household spending expectations were weak, and unemployment expectations unexpectedly improved. The data released on Tuesday showed that the decline in bank loans in China in July exceeded expectations, reaching the lowest level in nearly 15 years, raising concerns about the demand outlook. The market expects the trend of basic metals to be suppressed as a result.

Supply side: Global pure nickel production continues to increase. It is reported that in July 2024, the national refined nickel production reached 28900 tons, a month on month increase of 8.2% and a year-on-year increase of 33.87%. The expectation of nickel oversupply remains unchanged, and global inventories continue to accumulate. As of August 16th, LME nickel inventory was 114060 tons, with a further increase of 1656 tons compared to the previous week; Shanghai nickel inventory is 18111 tons, an increase of 1612 tons compared to the previous week.

In terms of demand, alloys are the main downstream of pure nickel, and there is good demand for alloys in military and shipping industries. Due to price fluctuations and abundant supply of goods, enterprises purchase at low prices. Stainless steel prices are running at a low level. On August 16th, the benchmark price of stainless steel plates in Shengyi Society was 12707.14 yuan/ton, a decrease of 1.22% from the beginning of the month. Stainless steel factories have high expectations for the peak season of gold, silver, and silver, but the pressure of supply and demand restricts the upward space of prices.

Market forecast: Under the current macro background, demand remains weak, and there is still oversupply and high inventory pressure in the nickel market. It is expected that nickel prices will continue to fluctuate weakly in the short term.