Nickel premiums mostly steady despite weak demand

Refined nickel prices remain stable globally in week ending November 8 with nickel briquette premiums under pressure due to ample supply

European nickel supply ‘ample’ with demand low

Spot market premiums and demand for refined nickel were largely steady in Europe this week.

Nickel briquette premiums came under further pressure as market participants gathered for the International Ferro-alloys Conference hosted by Fastmarkets in Prague, November 6-8.

The increasing availability of briquettes and expectations of shipments of material out of Asia continued to weigh on briquette premiums in Europe.

Fastmarkets assessed the nickel briquette premium, in-whs Rotterdam, at $600-900 per tonne on November 8, a decrease of $50 per tonne from the previous range.

Demand was reported to be poor in Europe, with market participants continuing to report concerns about poor stainless steel demand putting pressure on premiums, as well as preferring to focus on long-term contract negotiations.

“If you look at the [London Metal Exchange], the warehouses are almost all [filled with] briquettes,” one consumer said. “We are not concerned about the supply of briquettes next year.”

Briquette premiums were still under pressure, with market participants pointing to ample supply of the material globally, in comparison to other refined products such as cathode.

At present, among the 17,100 tonnes of nickel on-warrant in LME warehouses in Rotterdam, briquettes made up more than 93% of the warrants.

Other market commentators remained bullish on briquettes, however, noting their “versatility” for use in many of the end-user markets for nickel, from stainless steel to the battery industry.

Fastmarkets assessed the nickel 4x4 cathode premium, in-whs Rotterdam, at $900-1,300 per tonne on Tuesday, unchanged from a week before, with participants seeing the current prices as reflective of the market.

Some had heard of certain brands of 4x4 cathodes at prices as low as $650 per tonne, but there was no liquidity at such prices. Fastmarkets will continue to assess the premium for 4x4 cathodes in Europe in future pricing sessions.

Uncut cathode premiums 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 November 8, unchanged from a week before.

Premium ranges for nickel metal remained wide as a result of different valuations for certain brands of material, with some said to command the lower end of the range, and others achieving the upper end.

“Cathodes are the main market of concern for me, given the uncertainty of Russian supply,” one trader said.

US nickel and nickel briquette premiums ‘flat’

US nickel premiums were flat in the week to November 8, with nickel briquette and nickel 4x4 cathose premiums unchanged.

Fastmarkets again assessed the nickel briquette premium, delivered Midwest US, at 120-180 cents per lb on Tuesday, unchanged from the previous week.

And the nickel 4x4 cathode premium, delivered Midwest US, was also assessed at 120-180 cents per lb on the same day, similarly unchanged from the previous week.

Price opinions were level across the board over the week. Volumes continued to be low with the conference season coming to a close and 2023 long-term contract negotiations continuing.

A third market commentator reported seeing a few single loads at prices in the range of 125-150 cents per lb. But aside from these deals, no other sales, purchases, bids or offers were reported.

Fastmarkets’ sources continued to insist that prices were at parity for now, with 2023 requests for quotations continuing to drag on.

“Negotiations are taking longer than usual this year, and I do not think we will see significant movement until things get resolved,” one trader said. “It’s difficult for everyone to know how to hedge against the risk of price volatility. There are so many unknowns right now.”

Demand for nickel remains low in China

Demand for nickel was also reported to be low in China this week, with nickel prices remaining flat.

Premiums for nickel full plate imported into China remained stable during the week as market participants focusing on annual contract negotiations, 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.

And the corresponding 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.

The physical market remained thin but steady, despite aggressive offers reported from the annual talks.

Offers for Norwegian plates were higher, at more than $1,500 per tonne, at a time when market participants were reported to be examining a discussion paper on the acceptability of Russia-origin materials.

As a result, an isolated indication was reported higher than the prevailing range, but the majority of market participants saw the physical market unchanged, citing low demand as well.

“I don’t think the annual contract could be closed higher than $200 per tonne,” a buyer with a stainless steel maker said. “And spot trades should be more aligned with the physical world, where I saw strong resistance [to offers] from buyers.”

The cash/three-month spread for LME nickel was most recently in a backwardation of $90 per tonne, continuing to weigh on import conditions.

To keep up to date with the latest news and insights in the nickel market, visit our dedicated nickel market page.

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