Mumbai, 08 Oct (Commoditiescontrol): During China's National Day holiday, LME nickel prices fluctuated, reaching highs of $18,200/mt before retreating to around $17,000/mt. The initial rise, driven by favorable macroeconomic factors, was short-lived due to weak fundamentals, according to SMM.
Macro Factors Fuel Temporary Gains
Domestically, China introduced policies to boost market confidence, including cuts to the reserve requirement ratio and mortgage rates. Internationally, U.S. non-farm payroll
Fundamental Weakness Restrains Prices
Despite macro support, the nickel market remains under pressure from weak demand in the stainless steel and ternary materials sectors. Demand for ternary cathode precursors slowed in October, while nickel sulphate production saw a slight recovery, but overall consumption remained sluggish.
In stainless steel, demand is expected to remain weak in Q4, with some mills likely to destock. Tight high-grade nickel ore supplies pushed up NPI costs, but new projects are expected to ease supply constraints, potentially leading to a surplus.
Raw Materials and Refined Nickel Outlook
Nickel ore supply remained tight but has eased slightly. Low-grade ore prices softened, while high-grade ore stayed firm. Indonesia’s nickel policies will be key to future price trends.
Refined nickel production costs are near the break-even point, limiting further price declines. With inventory accumulation continuing, the market is watching for changes in demand and supply dynamics.
Conclusion
Nickel prices briefly benefited from macroeconomic support, but weak fundamentals in key sectors will likely keep gains in check. Close attention to raw material supplies, policies, and demand trends will be crucial moving forward.
(By Commoditiescontrol Bureau; +91-9820130172)
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