【Market Review】
On March 17, the main contract of nickel futures closed down 1.75% to 219,440 yuan, the highest price of the day was 230,470 yuan, and the lowest price was 217,000 yuan.
【Macro News】
The Russian government has asked steel, nickel and aluminum producers to keep selling prices low to support the domestic economy as Western countries led by the United States ramp up economic and financial sanctions on Russia. Government officials want producers to keep profit margins at 20% to 25%.
On March 16, the Australian government announced a total of A$243 million (US$176 million) in funding for four key mineral projects worth A$1.3 billion, nickel-manganese-cobalt, vanadium, high-purity aluminium and rare earths. Called “Enhancing Key Mineral Manufacturing Levels”. The largest, A$119.6 million, will be for the A$460 million integrated nickel-manganese-cobalt battery materials refinery in the Kalgoorlie region of Western Australia. This will be developed by Australian companies PureBattery Technologies and PoseidonNickel, with the goal of initially producing around 50,000 tonnes/year of cathode material precursors, enough to produce up to 1 million lithium batteries. Plant construction is scheduled to begin in August 2023. The refinery will enhance the competitiveness of the NickelWest division of Australian miner BHP Billiton, which currently operates Australia’s only downstream nickel-cobalt refinery, including sulphuric acid for the battery supply chain.
Nickel prices have risen sharply recently. The largest demand for nickel is the stainless steel industry. Therefore, the sharp fluctuations in nickel prices bear the brunt of the upstream and downstream of the stainless steel industry chain. In addition to stainless steel, nickel is also an important raw material for ternary lithium batteries. Due to the change in the price of nickel sulfate, the price of ternary materials has increased by 160,000-250,000 yuan per ton. Correspondingly, the price of ternary lithium batteries has increased by 31-47 yuan per kWh. Taking a 70kWh electric vehicle as an example, the recent The battery cost has risen by 2000-3300 yuan. (CCTV Finance)
[Summary of Institutional Viewpoints]
East China Sea Futures:
Tsingshan Group issued a statement that it had reached a silent agreement with a syndicate of futures bank creditors, and LME nickel opened at a lower limit. Returning to the price trend, the nickel price will return to the fundamental pricing after the situation eases.
At present, the supply and demand of nickel is still tight. Although the situation in Russia and Ukraine has eased, the supply disruption caused by sanctions may continue in the short term, and the price is supported. Therefore, the LME nickel price may not fall below the price before the squeeze.
In addition, if domestic inventory is used for overseas delivery, the domestic supply will be even more in short supply, and the previous pattern of external strength and internal weakness may be repaired.
In terms of operation strategy, before the contradiction between supply and demand of nickel is alleviated, it is still recommended to buy more on dips.
CITIC Construction Investment Futures:
The LME restarted nickel trading, and the nickel price fell again by the limit of 8%. The LME’s previous measures took effect obviously, and the risk of short positions was basically resolved. The price of nickel in London will continue to return to the fundamentals. In the short termShanghai NickelMaintain independent operation.
The bullish sentiment of stainless steel has quickly subsided, and the spot supply and demand under the influence of the epidemic is not clear. The market outlook is concerned about the shipment of ferronickel in Indonesia, which may have an impact on the production of stainless steel.
In general, LME nickel prices continue to fall, and it will take time to return to fundamentals. The stainless steel market fluctuates sharply, and both supply and demand are weak under the influence of the epidemic.
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