In July, nickel prices were low and fluctuated widely

1、 Trend analysis

According to the nickel price monitoring of the business society, the nickel price in July was mainly wide-ranging. At the beginning of the month, the nickel price was 182833.33 yuan / ton, and at the end of the month, the nickel price rose slightly to 183550 yuan / ton, with an overall decline of 0.39% and a year-on-year increase of 24.93%.

Macro aspect: according to the data of the U.S. Department of labor, the year-on-year increase of the U.S. consumer price index (CPI) from March to May was more than 8% for three consecutive months. In June, CPI increased by 9.1% year-on-year, hitting a new high in nearly 41 years. On July 21, the European Central Bank announced that it would raise the three key interest rates by 50 basis points, which was higher than the 25 basis points previously expected by the market and exceeded the European Central Bank’s forward-looking guidance in June. On the 27th, the Federal Reserve announced a 75 basis point increase in interest rates, raising the target range of the federal funds rate to between 2.25% and 2.5%. This is the fourth interest rate hike by the Federal Reserve this year and the second consecutive 75 basis points hike.

Supply side: Philippine nickel ore exports increased, and port inventories continued to accumulate. Indonesian Ferronickel, high matte and Hydrometallurgical intermediate MHP are gradually supplied in large quantities, and the domestic ferronickel market is in surplus. In June, China’s electrolytic nickel (pure nickel) output was 16150 tons, an increase of 9.9% month on month, and will continue to increase in July; In June, nickel sulfate produced 28800 tons of metal, an increase of 12.6% month on month.

In terms of demand: the crude steel output of domestic stainless steel plants decreased significantly month on month in June, and most of the steel plants lost money. Maintenance and production reduction were arranged intensively in June and July. The crude steel output of 33 domestic stainless steel plants was 2.6219 million tons, a month on month decrease of 8.56%. In June, the production and sales of new energy vehicles hit a record high, with an average year-on-year increase of 1.3 times. The output of China’s ternary precursor was about 66900 tons, an increase of 22.2% month on month. It is expected that the output of power batteries in July will increase by 10%-20% month on month, doubling year-on-year, and the demand for new energy nickel will continue to improve.

To sum up: the supply of nickel ore has increased, and the supply of nickel is relatively loose. In terms of demand, the downstream stainless steel is weak, and the demand for new energy nickel is good. In August, the fundamentals are similar, and the nickel price is expected to continue the trend of July, with a low-level wide range shock trend.