1、 Trend analysis

According to the nickel price monitoring of the business community, the nickel price rose first and then fluctuated widely in November. At the beginning of the month, the nickel price was 194716.67 yuan/ton, and at the end of the month, the nickel price rose slightly to 2019500 yuan/ton, with an overall increase of 3.71% and a year-on-year increase of 34.14%. In the first half of November, nickel prices rose rapidly, boosted by the historic low inventory, as the market expected the Federal Reserve’s policy to change.

Macro: In November, the minutes of the Federal Reserve meeting showed that most Fed officials supported slowing down the pace of interest rate increase. The quarterly adjusted annual CPI rate of the United States recorded 7.7% at the end of October, and fell back to below 8% again seven months later, the smallest increase since January 2022; The quarterly core CPI annual rate recorded 6.3%, lower than the expected 6.50%. The final annual rate of CPI in the euro area in October recorded 10.6%, a record high. Data released by the People’s Bank of China on October 10 showed that the increase in social financing scale in October 2022 was 907.9 billion yuan, 709.7 billion yuan less than the same period last year.

Supply: In terms of nickel ore, the supply and demand remain weak, but the willingness to support the price of the mine is strong, which is expected to be unsustainable due to the weak fundamentals. In terms of ferronickel, the disturbance of export tax news has made Indonesian ferronickel invisible inventory flow into the market, while the demand support also continues to weaken, and ferronickel may have further room for decline.

Demand: The stainless steel output in November is expected to be 3.085 million tons, an increase of 17.4% year on year, especially the 300 series output of 1.6295 million tons, an increase of 18.6% year on year. Compared with the past, production scheduling rose again in November against the trend, boosting nickel demand. In November, the market began to enter the off-season, and the potential negative effects of the market were also emerging, that is, there was a concern of excess under the condition of high output of stainless steel and nickel sulfate.

To sum up: December will be the center of the off-season, and this year’s terminal demand will force the industrial chain to shrink more significantly. The actual production scheduling of stainless steel and nickel sulfate may eventually be difficult to achieve as expected. For nickel, the supply and demand may continue to ease. In fact, due to the continuous landing of Indonesian nickel pig iron, intermediate products and nickel matte, the market expects that nickel supply and demand will continue to be surplus in the second half of the year. Nickel price is expected to be weak in December.