The expected increase in supply still exists, while the demand reduction is more certain, and the nickel supply and demand balance has not improved. Due to the inflection point of the rally in the nickel, the Shanghai nickel market lacked more bullish stimulus, and the nickel price will increase after the holiday, but the possibility of the downside will increase.
The current round of nickel prices hit a low point of 86,080 yuan / ton and opened a strong rebound, a short increase of 14% in a month, this wave of rebound is very fierce. From a fundamental point of view, the recent rebound in nickel prices has benefited from the release of supply less than expected andValeReduced production caused by a lot of money speculation. During the Chinese New Year holiday, the nickel rod continued to rise, with the highest increase of 7.2%. As the market risk appetite weakened, the high nickel retreat declared the end of the rebound. Although there may be demand for replenishment after the holiday, the nickel price rebound has reached a relatively high level, and it is difficult to further support the nickel price. Considering that the freshwater valley incident has been overdone, Shanghai nickel rebounded or nearly came to an end.
New project put into production less than expected
According to SMMResearchIt is understood that the self-supplied power plant of the Jinchuan Nickel Iron and Steel Plant in Indonesia has been put into operation recently. Due to the slow progress of the production side, the first 33000KVA submerged arc furnace was originally scheduled to be put into production in the second quarter. The company will start production of 4 33,000 KVA submerged arc furnaces in 2019, with a total designed capacity of 200,000 tons/year. In addition, a strike occurred on January 24th in the Morowali Park in Qingshan, Indonesia. It is reported that mainly local employees are caused by differences in salary and treatment. The second new nickel pig iron production capacity of the plant is expected to be launched in February, or there may be a short delay due to the strike. Chinese-funded Indonesian nickel pig iron production capacity is mainly concentrated in Qingshan Group, Delong Nickel,Emerging cast pipeAnd Jinchuan Group. At present, the nickel pig iron project of the two groups has been delayed, reflecting that the new project of Indonesian nickel pig iron has not been put into production. In addition, after the recovery of the production of stainless steel in Qingshan, Indonesia, in December last year, all the supporting nickel pig iron remained in Indonesia, resulting in no increase in Indonesian nickel pig iron imports from January to February, and the market has gradually diluted the bearish signs.
There is an inflection point during the long holiday
Recently, the dam failure of the tailings dam in Brazil's Vale has caused the iron ore to reduce production. Although there is no clear indication that the mine will affect the production of nickel in Vale, it is likely to affect the entire company as the top three nickel producers in the world. Operation indirectly leads to problems with nickel production. Secondly, the main downstream stainless steel of nickel is also a black-related variety, prompting more funds to focus on this variety. In conjunction with the recent neutrality of the nickel fundamentals, the nickel price has been adjusted slightly and then re-energized. However, from a fundamental point of view, domestic and international inventories are declining, and the structural shortage of nickel plates has become more apparent. Due to the current low inventory in the middle and lower reaches, considering that the black series price increase will inevitably lead to the rise of stainless steel, the middle and lower reaches of the holiday may drive a new round of replenishment demand. In addition, the profit of stainless steel has been gradually restored, and the production power of steel mills will be enhanced after the holiday. The steel mills that have been overhauled during the Spring Festival may resume production, and the demand for nickel market may be significantly improved. However, during the Spring Festival holiday, Lun Nickel has already had an inflection point. It is speculated that the marginal support for high nickel prices is limited. If the terminal consumption is still weak, it will not be able to consume the inventory accumulation caused by the replenishment, which further drags the rebound of Shanghai nickel.
Lack of bullish factors
The continued de-inventory of LME stocks has brought tight expectations to the market. By splitting LME stocks, nickel bean stocks have fallen by more than 45% since 2018, while nickel sheet stocks have fallen by about 43%, which means that nickel will face The problem of extremely low delivery stocks. Although the previous LME spot premium (0-3) has been abnormal, but recently returned to the depth of the water, indicating that the structure of the premium does not materially reverse. Then, has the Shanghai nickel rebound peaked? According to the conversion relationship between high-nickel iron and nickel plates, the recent rise in nickel prices has led to the touch of the upper boundary line of high-nickel pig iron. However, nickel prices are still likely to rise too much. First, the reduction in scrap supply has boosted the price of high-nickel pig iron, leading to a gradual rise in the upper boundary. In addition, the pre-holiday nickel market inventory is low, and the normal return to work downstream after the holiday will drive positive feedback from the demand for replenishment. Of course, the rise in nickel prices did not continue, and the negative bearish supply in Indonesia was only delayed.
In summary, in the case of more fundamental neutrality, the delay in the production of Indonesian nickel pig iron and the sudden reduction in production in the Vale have led to a strong rebound in nickel prices. However, the expected increase in supply still exists, while the demand reduction is more certain, and the nickel supply and demand balance has not improved. Due to the inflection point of the rally in the nickel, the Shanghai nickel market lacked more bullish stimulus, and the nickel price may increase inertia after the holiday, but the possibility of the downside is further increased. It is recommended that investors pay attention to short-term opportunities.
(Article source: Futures Daily)
(Original title: Shanghai Nickel is more difficult to move higher)