SHANGHAI, Jun 2 (SMM) - On the supply side, spot prices pure nickel maintained a downward trend this week, and the overall trading volume improved significantly compared with last week. The prices of nickel sulphate have been falling. As the average cost of nickel salt stocks fell, the prices of salt continued to fall, but the profit has been restored to some extent. The terminal consumption of NPI remained weak, and the accumulated stainless steel inventory cannot be consumed, which is bearish for stainless steel prices. The profit margin of steel mills was narrow, which put pressure on the prices of NPI. On the demand side, some steel mills may be overhauled in June, and production may not improve greatly compared to May. Since no one has any idea about when the current downward trend will end, market players were generally pessimistic over demand recovery. In terms of alloy factories, thanks to the recent correction in the spot prices of pure nickel as well as the improving pandemic situation, the operating rates of downstream manufacturers have increased, generating more demand for raw materials. To sum up, the current nickel industry chain remains weak in both supply and demand, and the low inventory continues to provide strong support for nickel prices.

Pure nickel: In the spot market, Jinchuan nickel starts to be quoted against SHFE 2207 contract from yesterday, with premiums of 8,500-9,000 yuan/mt, an average price of 8,750 yuan/mt, up 4,750 yuan/mt from last week. NORNICKEL nickel was quoted at 8,500-9,000 yuan/mt, with an average price of 8,750 yuan/mt, up 3,350 yuan/mt from a day ago. Based on the SHFE front-month and next-month spread of 4,500 yuan/mt, premiums of pure nickel dropped as a whole yesterday. The premiums of NORNICKEL nickel dropped as the imports have been circulating in the market. Premiums of Jinchuan nickel also fell with slightly rising supply. In terms of nickel briquette, the prices were 213,800-214,500 yuan/mt, which was 7,350 yuan/mt lower than a day ago. The declines was mainly because its cost efficiency was poorer than intermediate goods. Coupled with the extensive use of nickel plate in the alloy sector, there were basically no transactions of nickel briquette. As such, the traders significantly lowered their premiums to around 0 yuan/mt over SHFE 2207 contract. 

NPI: The SMM average price of NPI was 1,542.5 yuan/mtu. There were current no new transactions as both upstream and downstrewam players were wait-and-see amid poor downstream demand and great downward pressure on NPI prices. On the demand side, stainless steel prices kept falling. The terminal consumption of NPI remained weak, and the accumulated stainless steel inventory cannot be consumed, which is bearish for stainless steel prices. The profit margin of steel mills was narrow, which put pressure on the prices of NPI. NPI prices are likely to fall to the break-even point. On the supply side, the downward room of ore prices was limited, hence the cost of NPI was still high. Therefore, NPI plants were unwilling to greatly lower their prices, but oversupply still heavily pressured NPI prices.  It is expected that NPI prices will continue to decline in the future. 

PCAM and CAM: The prices of NMC materials dropped slightly. The cost side was driven down slightly by the precursor market. In terms of demand, the power battery market has seen a slight recovery, but the pace of recovery is still slow, and the e-bike and electronics sectors have not shown obvious signs of recovery. Inquiries with small orders increased, with a small number of transactions successfully made. The prices are likely to remain stable in the future with support from the cost side on the backdrop of diversified trends of lithium salt and precursor markets. LFP prices changed little this week. Recently, the prices of LFP have risen slightly with lithium salt, as the prices of iron phosphate were stable. As the impact of the pandemic gradually subsided, the downstream inquiries and actual transactions of LFP have increased recently. The operating rates of most large manufacturers rose in May, indicating an improving market. However, some leading manufacturers have been forcing down the prices of LFP, and the profits of LFP plants narrowed. It is expected that LFP prices will remain stable in the future. 

Stainless steel: Yesterday, the spot prices of stainless steel with different series in Wuxi and Foshan continued to decrease. 304 stainless steel prices were further reduced by about 100 yuan/mt, and the base price was about 19,100 yuan/mt. The prices of stainless steel with deburred edge was around 20,000 yuan/mt. While HRC prices have seen low offers of around 18,800-18,900 yuan/mt. At present, the spread between cold and hot-rolled coil recovered slightly. Yesterday, Tsingshan lowered the list price significantly. And Delong, after the traders picked up the goods, also lowered the prices. Although the inventory of stainless steel continued to drop last week, according to SMM research, the arrivals have been less than before. Steel mills were also trying to firm the prices owing to the stocks of high-priced goods, and a quick drop in prices would hurt their profits. Some steel mills may be overhauled in June, and production may not improve greatly compared to May. Since no one has any idea about when the current downward trend will end, market players were generally pessimistic over demand recovery. On the cost side, the prices of NPI and ferrochrome both drop from high amid slight oversupply in China, resulting in weak cost support. The import window has been open for several days, but the imports did not grow significantly as Feni supply is mostly in the form of long-term orders and owing to the issue of pricing method. In terms of stainless steel scrap,  the overall shipment volume has shrunk compared with before, and the supply is still limited. The prices of 304 cold-rolled coils moved between 19300-19500 yuan/mt, and the prices of 304 hot-rolled coils were between 18800-19400 yuan/mt. 316L/2B was reported at 30,600-30,900 yuan/mt in morning trade, which remained stable. As of 10:30 am (Beijing time), the SHFE SS 2207 contract stood at 18,305 yuan/mt, and the spot premiums in Wuxi were 1,165-1,365 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt). 

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