SHANGHAI, Dec 20 (SMM) - On the supply side, the imported pure nickel kept suffering losses, and domestic pure nickel social inventory fell 2,700 mt as of last Friday, keeping the spot supply tight. The spot premiums were high as a result. For NPI, the supply in the spot market was still ample at present despite falling social inventory. On the demand side, the spot stainless steel prices in Wuxi and Foshan fell along with falling futures contract prices. The deteriorating pandemic situation across the country weighed on the terminal consumption, and the operating rates of downstream fabricators were also low. In the alloy sector, the consumption of pure nickel is likely to fall as the sector has entered the off-season. To sum up, SHFE nickel price is likely to stay on the mild downward track amid weak demand but supported by falling pure nickel inventory.
Pure nickel: In the spot market, Jinchuan nickel was quoted with premiums of 8,200-8,500 yuan/mt as of December 19, with an average of 8,350 yuan/mt, up 100 yuan/mt from the previous trading day. NORNICKEL nickel was quoted with premiums of 6,400-6,500 yuan/mt, with an average of 6,450 yuan/mt, up 200 yuan/mt on a daily basis. The spot premiums were high supported by tight supply though pure nickel futures prices fell. In terms of nickel briquette, the prices stood at 218,000-218,500 yuan/mt, down 900 yuan/mt from the previous trading day. The transactions were poor for its meagre cost efficiency. Flexible Joints
NPI: As of December 19, SMM Ni 8-12% high-grade NPI was 1,360 yuan/mtu (ex-factory, tax included), down 2.5 yuan/mtu from the previous trading day. NPI prices were pressured amid palpably falling stainless steel futures contract prices recently. NPI plants lowered their quotes accordingly. On the supply side, the NPI market has not yet started to suffer a supply shortage though the inventory dropped constantly in the early stage. On the demand side, due to the poor consumption of stainless steel, the stainless steel mills have refrained from purchasing NPI based on the current price level amid the poor orders and the completion of stock building. NPI prices are expected to remain volatile with some downward risks in the near term.
Stainless steel: As of December 19, the prices of spot stainless steel in Wuxi and Foshan both fell. According to SMM research, the recent deteriorating pandemic situation across the country has weighed on the operating rates of downstream fabricators, in addition to poor terminal consumption. As such, the demand for spot stainless steel has dropped significantly, and the actual transactions were muted despite active market inquiries. In terms of cost, NPI plants have slightly lowered their quotes amid falling stainless steel prices as a result of poor transactions as well as the stainless steel mills completing their restocking plans. NPI prices are expected to fall slightly in the near term. The prices of ferrochrome remained flat on Monday amid excess inventory and the seasonal low in the industry. However, given that chrome ore traders have sufficient confidence in ore prices and the short-term chrome ore prices have been strong, it is expected that the ferrochrome prices may not fall sharply in the near term.
On the whole, the overall transactions of spot stainless steel have weakened recently, and it is expected that the spot prices of stainless steel will fall slightly in the short term. On Monday December 19, the 304 cold-rolled coil in Wuxi was reported at 17,100-17,300 yuan/mt against the national average of 17,120 yuan/mt. 304 hot-rolled coil in Wuxi was quoted at 16,600-17,000 yuan/mt against the national average of 16,780 yuan/mt. The prices of 316L cold-rolled coil were 29,900-30,300 yuan/mt in Wuxi, with a national average of 30,040 yuan/mt. The prices of 201J1 cold-rolled coil were 9,750-9,950 yuan/mt in Wuxi with a national average of 9,825 yuan/mt. 430 cold-rolled coil in Wuxi was reported at 7,800-8,000 yuan/mt against the national average of 7,920 yuan/mt. As of 10:30 am (Beijing time), the SHFE SS 2301 contract stood at 16,810 yuan/mt, and the spot premiums in Wuxi were 460-660 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt)
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