SHANGHAI, Sep 1 (SMM) - On the supply side, the premiums of spot pure nickel trended toward different directions. Yesterday, the premiums of Jinchuan nickel stabilised and rebounded supported by downstream rigid demand, but the premiums of NORNICKEL nickel maintained a downward trend due to the weak demand. For NPI, the situation of oversupply kept containing NPI prices as a result of high inventory and constantly inflow of Indonesia NPI. On the demand side, the prices of spot stainless steel in Wuxi and Foshan were basically stable yesterday, while the overall transactions were thin. It is expected that the spot prices will remain rangebound with some falls in the near term. In terms of alloys, although SHFE nickel prices are still at a high level, the demand for Jinchuan nickel plates from the sector of military superalloys is still unabated due to robust terminal demand. However, the demand for NORNICKEL nickel applying to civilian alloys has been greatly affected by high nickel prices, and has remained low for quite some time. To sum up, although the downstream demand for pure nickel has picked up slightly recently, nickel prices may still drop to some extent. 

Pure nickel: In the spot market, Jinchuan nickel was in premiums of 7,500-8,500 yuan/mt with an average of 8,000 yuan/mt yesterday August 31, up 2,750 yuan/mt from a day ago (over SHFE 2210 contract); NORNICKEL nickel was in premiums of 2,100-2,500 yuan/mt with an average of 2,300 yuan/mt, down 350 yuan/mt in a single day (over SHFE 2209 contract). NORNICKEL nickel is still quoted against SHFE 2209 contract partly due to its poor demand, and the traders still have most of their capitals in SHFE 2209 for hedging purpose. The spot transactions weakened again with nickel prices rebounding yesterday. In terms of nickel briquette, the prices stood at 174,000-175,000 yuan/mt, up 7,150 yuan/mt on a daily basis. The cost efficiency of briquette still lagged behind that of intermediates, which, coupled with the fact that the alloy sector mostly uses nickel plate as the raw material, greatly suppresses the transactions of briquette, with almost zero successful sales cases recently.

NPI: As of August 31, the average price of SMM high-grade NPI stood at 1,257.5 yuan/mtu (ex-factory, tax included), flat from a day ago. No transactions were heard yesterday. On the supply side, the follow-up trend of the NPI market is still unclear. In order to avoid further losses caused by the continued decline in prices, the traders were less willing to build the stocks, and the market became less effective in serving as a reservoir. The situation of oversupply kept containing NPI prices as a result of high inventory and constantly inflow of Indonesia NPI. On the demand side, the terminal is temporarily in short supply of stainless steel due to inventory mismatch, but there is no sign of a substantial recovery in stainless steel demand, and the demand for NPI has remained weak, which is not expected to fuel NPI prices. NPI prices are expected to fall further in the short term.

Stainless steel: As of August 31, the prices of spot stainless steel in Wuxi and Foshan were basically stable, and the prices of 304 hot rolled coil fell slightly. According to SMM research, the prices offered by Tsingshan Group were the same as the previous ones, and the market quotation was flat as a whole. HRC was still out of stock, and the market transactions were muted as well. The social inventory, on the other hand, dropped more quickly compared with early August with the stockout of some specifications as well as the prices stabilising. In terms of cost, the prices of high-grade NPI stabilised, and are likely to fall slightly amid the stalemate between supply and demand. Ferrochrome prices dropped fractionally, and there were few retail transactions in the market. Most ferrochrome were shut down amid serious losses, and the prices are likely to keep rangebound with occasional drops in the near term. The prices of 304 cold-rolled coils moved between 15800-16300 yuan/mt, and the prices of 304 hot-rolled coils were between 15400-16000 yuan/mt. 316L/2B was reported at 26,000-27,200 yuan/mt in morning trade, 201/2B at 9,250-9,450 yuan/mt, and 430/2B at 7,900-8,300 yuan/mt. As of 10:30 am (Beijing time), the SHFE SS 2210 contract stood at 15,450 yuan/mt, and the spot premiums in Wuxi were 520-1,020 yuan/mt. (Spot prices of deburred edge products = Spot prices of burr edge products + 170 yuan/mt).

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