Global nickel premiums under pressure from low demand

Spot-market premiums for refined nickel products were mostly flat amid quiet conditions in the week to Tuesday November 1, with the focus remaining on annual contracts

• Demand from stainless steelmakers in Europe low
• High backwardation keeps Chinese buyers at bay
• Low supply fails to inspire buying activity in US

Europe premium ranges for nickel metal remain wide

Spot market premiums for refined nickel were steady in Europe on the week to Tuesday, with much of the region celebrating a public holiday on November 1. Annual contract negotiations remains the priority for many in the market.

Fastmarkets assessed the nickel briquette, in-whs Rotterdam premium at $650-950 per tonne on Tuesday, unchanged from a week earlier.

Demand was reportedly poor, with participants continuing to report concerns over poor stainless steel demand in the region putting pressure on premiums.

Briquette premiums remained under pressure, with participants pointing to ample global supply in comparison to other refined products such as cathode.

At present, of the 17,244 tonnes of on-warrant nickel in LME warehouses in Rotterdam, briquette accounts for more than 92%.

Meanwhile, Fastmarkets assessed the 4x4 cathode premium, in-whs Rotterdam at $900-1,300 per tonne on Tuesday, unchanged for a third week with participants seeing prevailing levels as reflective of the market.

Similarly, premiums for uncut cathode in the region were also flat due to illiquidity.

Fastmarkets assessed the nickel uncut cathode premium, in-whs Rotterdam at $400-800 per tonne on Tuesday, also unchanged for a third week.

Premium ranges for nickel metal remain wide in the region as a result of different valuations for certain brands of material, with some said to fall on the lower end of the range, and others achieving higher numbers.

China’s nickel premium prices remain stable

Premiums for nickel full plate imported into China remained stable during the week due to unfavorable import conditions despite the existence of higher offers, market sources said.

Fastmarkets assessed the nickel min 99.8% full plate premium, cif Shanghai at $350-450 per tonne on Tuesday, unchanged since September 20.

Fastmarkets assessment of the nickel min 99.8% full plate premium, in-whs Shanghai was $400-450 per tonne on the same day, also unchanged since September 20.

A high backwardation continued to dampen import appetite, leading to thin liquidity, although offers were quoted higher.

Low inventories in the spot market and potential sanctions on Russian units led traders to raise their offers, Fastmarkets heard.

Non-Russian units were heard to have become more sought-after in the West, resulting in the higher offers.

This trickled down to the Chinese market and was particularly evidenced by the offer for Norwegian units, which were quoted at above $1,000 per tonne, compared with $700-800 per tonne previously.

But Russian units remained the mainstream products in the Chinese market, and were reportedly also experiencing upward - albeit smaller - movements in their offers.

An offer for bonded Russian units was quoted in the $400-per-tonne region, compared with those made in the $300-per-tonne region previously, though no deal has been concluded. In turn, most participants reported the market as being unchanged in the absence of actual transactions.

Meanwhile, bonded stock is reportedly low. Fastmarkets assessed Shanghai bonded nickel stock at 1,800-8,900 tonnes on October 31, down by 39.5% year on year.

But the low inventories failed to generate buying interest, with only 400 tonnes being drawn down from the sheds over the month.

“I’m seeking Russia-origin full plate for a customer but it’s not easy because there are few offers or inquiries for indications in the spot market,” a nickel trader in southern China said.

Another nickel trader in Shanghai said the chances for imports were minimal and that buyers were unlikely to risk doing so amid a high backwardation.

The cash/three-month spread for LME nickel was most recently at a $86.90-per-tonne backwardation.

United States nickel premiums flat this week

US nickel premiums were flat again in the week to Tuesday. Volumes remained low as follow up discussions from last week’s LME Week, a conference in Scottsdale, Arizona, and 2023 requests for quotes (RFQs) continued to keep participants busy.

Fastmarkets assessed the nickel briquette premium, delivered Midwest, US at 120-180 cents per lb on Tuesday, unchanged since September 27.

Fastmarkets assessed the nickel 4x4 cut cathode premium, delivered Midwest, US at 120-180 cents per lb on Tuesday, also unchanged since September 27.

Fastmarkets sources continued to insist that prices were in parity, as rare as the phenomenon is.

Confirmed sales fell during the week and most sources reporting unchanged price opinions. Several sources said that they recently saw trades being executed within the assessment range.

One 20-tonne briquette sale was confirmed at 125 cents per lb.

Fastmarkets sources continue to report that most of the market is taking a “wait and see” approach with “everyone awaiting feedback from 2023 RFQs.”

One trader: “All is really quiet, there has been a lot of travel and meetings for everyone lately with little business to be had, but supply issues remain.”

Supply indeed remained tight in the past week, with several sources lamenting about how difficult it was to secure material.

Keep up to date with the latest news and insights in the nickel market by visiting our dedicated nickel page.

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