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Nickel premiums were down across the board in the US, finally putting an end to months of parity, but some slight increases were seen in uncut cathode premiums in Europe because of fresh liquidity.
The markets in China remain closed for the Lunar New Year holidays in East Asia, with participants set to return on January 30.
US nickel premiums finally broke parity and declined when volume returned to the markets.
Fastmarkets assessed the nickel briquette premium, delivered Midwest US, at 90-150 cents per lb on Tuesday, a 20% decline from the previous week’s assessment at 120-180 cents per lb.
The week showed a strong return of demand to the market, with the number of reported deals heard to be picking up significantly. First-hand reports of transactions ranged from 80 cents per lb to 125 cents per lb, with other deals heard in the range of 90 cents per lb to 130 cents per lb.
Price opinions also shifted over the week, with most sources reporting that prices had eased, although some sources still saw them as flat.
Notably, while Fastmarkets confirmed a 20-tonne sale at 80 cents per lb, most sources thought that figure was low. That said, numerous sources reported hearing of activity around 90 cents per lb, and a 10-tonne deal was reported to have closed at that price.
On the higher end, numerous sources said that a lowering of the top end of the assessment range would be appropriate and warranted, given recent activity.
Opinions on an appropriate level varied, but when it was mentioned that a sale last week was reported at 150 cents per lb, many thought that was appropriate for the top end of the range.
“Responsibly sourced briquettes remain in solid demand,” one trader said. “The repository looks positive [for this] year, and [would be] even better if we see the background macro situation improving further.”
“Premiums are coming off a bit,” another trader said. “We have now heard of some small deals done at 90 cents to $1.00 per lb, [but] I don’t know if this is isolated or a trend.”
Notably, market sources did disagree on whether the briquette and 4×4 markets were still in parity. The majority of the transaction data from the assessment week supported a lower briquette premium, while 4×4 material was still hard to locate, with recent sales supporting higher premiums.
Fastmarkets assessed the nickel 4×4 cathode premium, delivered Midwest US, at 110-150 cents per lb on January 24, a 13.3% decline from the previous week’s 120-180 cents per lb assessment.
As with briquettes, Fastmarkets’ sources agreed that premiums have come off from previous levels, particularly on the higher end of the range. But volumes remained lower, with tight supply and weaker demand (compared with briquette demand) supporting current price levels.
Over the week, more market participants argued for a level low point of the assessment range but a diminished high. As with briquettes, many sources felt that a high of 150 cents per lb was appropriate because it has been some time since a sale was reported in the 150-180 cents per lb range.
While most sources lobbied for a 120 cents per lb low, Fastmarkets confirmed a 20-tonne sale this week at 110 cents per lb. A few other sources acknowledged hearing of sales at this price so anchoring the assessment to hard data was appropriate.
Across the board, sources were relieved by the increase in activity, although opinions varied on where prices may go from here.
Spot premiums in Europe for refined nickel products showed mixed results in the week to January 24 because market participants reported that demand in the region was waning.
Premium ranges for material remained wide, though, with market participants continuing to note differences in valuations for certain brands of material. European material for products such as cathode was still able to achieve higher premiums.
For the first time since November 29, 2022, briquette premiums shifted, with weak demand from the stainless steel sector pushing premiums lower.
Fastmarkets assessed the nickel briquette premium, in-whs Rotterdam, at $450-750 per tonne on January 24, a decrease of $50-100 per tonne from the previous range.
“We’re really seeing a softening in briquette [demand]. We’re not able to achieve the same [prices] as before,” one trader told Fastmarkets.
But others in the market noted that the tightness in supply in the region meant that historically high premiums were likely to persist.
“There were slim stocks at the end of 2022, which means there will be a nearby lag before imports come in, supporting prices in the short term,” a second trader said.
Total on-warrant stocks for nickel briquettes in London Metal Exchange-registered warehouses in Rotterdam came to 13,038 tonnes.
Elsewhere, fresh liquidity reported for uncut cathodes resulted in a slight widening upward of the premium in Europe, due to tightness in the supply of high-purity brands of cathode.
Fastmarkets assessed the nickel uncut cathode premium, in-whs Rotterdam, at $400-850 per tonne on January 24, widening upward by $50 per tonne week on week.
One deal was reported to Fastmarkets within the new range, with other offers reported above $900 per tonne for certain brands of material. But no liquidity was captured at such levels, preventing any further increase for now.
Nickel 4×4 cathodes were the sole unchanged market in Europe over the week, with participants noting that fundamentals for this market were unchanged.
Thin availability of cathodes in the region, plus constrained cutting capacity, continued to underpin historically high premiums.
Fastmarkets assessed the nickel 4×4 cathode premium, in-whs Rotterdam, at $800-1,300 per tonne on Tuesday, unchanged since early December, with liquidity reported within the current range.
Some market participants said that premiums as high as $1,600 per tonne were achievable for certain brands of 4×4 cathode, but no liquidity was reported at such levels.
Fastmarkets will look to confirm in future pricing sessions if such premiums are reflective of the open and competitive spot market.
To keep track of all the latest developments in the nickel market, head to our dedicated nickel market page.