1、 Trend analysis

According to the monitoring of nickel prices by Business Society, nickel prices have slightly declined this week. As of February 2nd, the spot nickel quotation was 128516.67 yuan/ton, a decrease of 1.76% from the beginning of the week and a year-on-year decrease of 43.88%.

According to the weekly rise and fall chart of Business Society, nickel prices have fallen by 7 and risen by 5 in the past 12 weeks, with a slight decline in nickel prices recently.

On the macro level, the macro atmosphere has clearly turned bearish. The unexpectedly strong growth rate of US retail data in December has put pressure on expectations of early interest rate cuts, and the US dollar index has soared to a one month high.

Supply side: Capacity expansion and clearance cycle. In December 2023, the national refined nickel production reached a total of 24500 tons, a month on month increase of about 6% and a year-on-year increase of 40.57%; It is expected that the national refined nickel production will reach 23700 tons in January 2024. Major overseas nickel companies resumed production in the third quarter, with good profits and weak willingness to proactively reduce production.

In terms of demand: Some terminal industries have high prosperity, but the growth rate of demand is not as fast as supply. Alloy is the main downstream of pure nickel, and there is a very good demand for alloys in military and shipping industries. Enterprises “replenish inventory at low prices, but do not purchase at high prices.”. The demand for electroplating is relatively stable. Stainless steel inventory returned to neutral levels, and steel mills reduced production in January. The space for nickel beans used in new energy has been squeezed out. Last week, nickel prices rebounded, suppressing demand.

In summary, weak cost support and downstream buying on dips, coupled with policy uncertainty factors in the subsequent Indonesian election, have led to a more pronounced attitude of downstream buying on dips and not buying at high prices. Nickel prices have accumulated inventory for three consecutive weeks after rebounding. It is expected that nickel prices will continue to fluctuate at a low level.