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Supply concerns superimposed on capital boost, and nickel prices rose sharply inside and outside the market

03 2022.03

Supply concerns superimposed on capital boost, and nickel prices rose sharply inside and outside the market:

(1) On March 3, local time, the second round of talks between Russia and Ukraine ended, and the two sides reached an agreement on a temporary ceasefire and the establishment of humanitarian channels. The two sides will maintain communication and cooperation on the establishment of humanitarian corridors in the near future. Mezinsky, head of the Russian delegation, said that the main issue to be resolved in today's negotiations is to save civilians. He also said that the representatives of the Russian and Ukrainian defense ministries have reached an agreement on the form of opening a humanitarian corridor for civilians and the method of declaring a temporary ceasefire to ensure the evacuation of civilians, which is a substantial progress in the negotiations. The third round of negotiations will be held in the near future, and it is not ruled out that Russia and Ukraine will conduct multiple rounds of negotiations. Podoljak, an adviser to the Ukrainian president's chief of staff, said the Ukrainian side did not get the desired result.

(2) Recently, the high nickel matte refining project of South Korea's Posco Iron and Steel Group (POSCO), which China ENFI undertakes design, core equipment supply and on-site technical support, officially started. The scale of this project is about 30,000 tons of high matte nickel per year. It adopts the pressure leaching technology of China ENFI's core expertise, and uses two stages of atmospheric leaching and one stage of oxygen pressure leaching. Cobalt sulfate product, and anhydrous sodium sulfate by-product.

(3) Vale Indonesia Tbk (INCO) has confirmed that the final investment decision (FID) for the Bahodopi Nickel Smelter in Morowali Regency, Central Sulawesi will be postponed to April 2022 as there must be a decision by INCO management Review technical issues.

(4) As of February 28, 2022, Mysteel has investigated 34 samples of ferronickel smelting projects in Indonesia, including a total of 144 EF/RKEF production lines, and a total of 5 new ferronickel production lines put into operation in February. In February 2022, the output of medium and high nickel ferrous metals was 82,700 tons, a decrease of 4.04% from the previous month and a year-on-year increase of 32.46%.

(5) Zhang Bo, member of the National Committee of the Chinese People's Political Consultative Conference: It is recommended to speed up the revision of the "Catalogue of Encouraged Imported Technologies and Products", encourage the import of new energy materials such as cobalt, nickel, and copper, increase the import of primary products such as steel billets and slabs, and appropriately expand scrap and high-quality recycling. The import of raw materials improves the level of resource recycling in my country.

3. Summary and outlook: (1) Macroscopically, the conflict between Russia and Ukraine continued to escalate, and Europe pre-sanctioned Russia's crude oil exports. Crude oil prices rose sharply, and Shanghai nickel Masukura rose. Since Russia's nickel supply accounts for 10% of the world's nickel supply, the market is still worried that nickel supply will be affected. In addition, if the US and Europe impose sanctions on Russia, the market expects that the number of Russian nickel exports to China may increase, so the recent performance of London nickel is stronger than that of Shanghai nickel. The chairman of the Federal Reserve released the signal of raising interest rates by 25 basis points in March, and the risk aversion in the market fell back, forming a certain support for non-ferrous metals. Supported by supply concerns and low inventories, short-term nickel prices remain strong, and follow-up attention will be paid to the Fed's rate hike process and changes in geopolitical news.

(2) From a fundamental point of view, 1) Global nickel inventories remain depleted. Sanctions that may be triggered by the Russian-Ukrainian conflict have intensified market concerns about overseas nickel supply, and import losses have expanded significantly. LME nickel spot premiums have reached new highs. Follow-up attention will be paid to whether the United States will Financial sanctions against Russia; 2) The supply of ferronickel is still tight in the short term, and the rise in ore prices still raises the cost of ferronickel production, but the recent performance of stainless steel is weak, which may cause certain pressure on raw materials, and the price of ferronickel is expected to remain stable in the short term; 3) With the successive resumption of production by steel mills in the early stage, the market's expectation for the subsequent increase in the supply of stainless steel has risen. Inventories in Foshan and Tin are still increasing this week, and follow-up attention will be paid to the production of domestic stainless steel production capacity.

In general, the situation in Russia and Ukraine is still uncertain, crude oil prices have risen sharply, and commodities are still boosted. As the market expects that the number of Russian nickel exports to China may increase after the European and American sanctions, the performance of London nickel has been stronger than Shanghai nickel recently. , if the expectation fails, Shanghai nickel still needs to make up for the increase, and follow-up attention will be paid to the progress of relevant news. Global nickel inventories are still at historically low levels. Under the support of low inventories, nickel prices will remain strong in the near future, and volatility is expected to increase. At the same time, attention should be paid to the commissioning of the Qingshan high matte nickel project. In terms of operation, it is recommended to go back and do more, cautiously chasing highs, and pay attention to the rolling opportunities of Shanghai Nickel under the pattern of low warehouse receipts, and pay attention to controlling risks.

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