European nickel uncut cathode and briquette premiums rise but premiums steady elsewhere

Continued tightness of class one supply within Europe and increased buying interest amid falling London Metal Exchange nickel prices and fresh liquidity have prompted an increase in premiums within Europe, while US and Chinese premiums remain steady for now

Volatility returns to European nickel market

Volatility has once again returned to refined nickel premiums in Europe, with uncut cathode and briquette premiums rising as the market continues to diverge in terms of direction.

The continued weakness in LME nickel has encouraged some consumers to return to the market, with a number of spot offers and deals reported to Fastmarkets.

The biggest movement was in uncut cathode premiums, which rose sharply amid higher offers and assessments from market participants.

Fastmarkets assessed the nickel uncut cathode premium, in-whs Rotterdam at $400-1,000 per tonne on Tuesday March 14, an increase of $150/t at the top of the previous range, which was assessed on March 7.

There were other offers heard that were significantly above the new top of the range, but no liquidity was confirmed at such levels, capping the increase for now, Fastmarkets heard.

Market participants noted a general tightness in the market for uncut cathode in the region, which pushed premium levels higher for some brands of material.

This tightness is currently reflected in the LME warehouse stock levels within the region, where there are just 6,012 tonnes of uncut cathode on-warrant in LME sheds in Rotterdam.

The move further widens the premium range, which is already significantly broader than historical averages, with market participants continuing to note distinct differences in regional brand valuations.

Uncut cathode premiums are now at their highest level since September 27, 2022.

Elsewhere, following higher liquidity, briquette premiums in the region also increased.

Fastmarkets assessed the nickel briquette premium, in-whs Rotterdam at $450-880 per tonne on Tuesday, an increase of $80 per tonne at the top of the previous range, which was assessed on March 7.

Several market participants indicated that premium levels could be as high as $1,000 per tonne in the region, but there was little buying interest at these levels, Fastmarkets heard.

There was one deal above the previous range, which supported the move upward, and this was reported to Fastmarkets.

Market participants noted that briquette demand remains robust globally, keeping supply tight, although many were keeping a close eye on developments in Asia, where steady outflows of material are happening amid a low-premium environment.

Briquette premiums are now at their highest level since November 22, 2022.

Rounding out the premiums in the region, 4×4 cathode premiums were steady amid illiquidity.

Fastmarkets assessed the nickel 4×4 cathode premium, in-whs Rotterdam at $800-1,300 per tonne on Tuesday, unchanged from a week prior.

Thin availability of cathodes and constrained cutting capacity in the region continue to underpin historically high premiums.

United States reports quiet period for nickel prices

US nickel premiums were flat again amidst quiet activity in the week to Tuesday.

Fastmarkets assessed the nickel briquette premium, delivered Midwest US, at 80-125 cents per lb on Tuesday, unchanged over the previous week.

Two separate 20-tonne sales were confirmed at 100 cents per lb each this week.

No other deals, bids, or offers were reported this week, with overall volumes remaining muted.

“There’s just nothing going on out there this week,” one trader source said. “All eyes are on the developing banking crisis and Russian sanctions, so everyone is afraid to take any big risks,” they concluded.

Others echoed this sentiment. Aside from the sparse briquette activity, cathode sales remained dormant.

Fastmarkets assessed the nickel 4×4 cathode premium, delivered Midwest US, at 80-120 cents per lb on Tuesday, unchanged over the previous week.

No cathode deals, bids, or offers were reported and price opinions were flat across the board this week.

Fastmarkets sources continue to report that interest in cathodes is relatively low as compared to briquettes.

Nickel premiums in China remain flat

Premiums of nickel full plate imported into China remained flat over the pricing week to Tuesday as import losses lingered, sources said.

All price assessments were within prevailing ranges, suggesting a steady import market with no liquidity.

Fastmarkets’ weekly assessment for the nickel min 99.8% full plate premium, in-whs Shanghai stood at $280-400 per tonne on Tuesday, while Fastmarkets’ assessment for nickel min 99.8% full plate premium, cif Shanghai was at $250-350 per tonne. Both premiums have been unchanged since February 14 and January 10, respectively.

Arbitrage remained unprofitable, though nickel prices on both the London Metal Exchange and the Shanghai Future Exchange saw a big drop over the week, market participants said.

“We watched the arbitrage closely every day and saw no import opportunities for now, though nickel prices on both the LME and SHFE are changing rapidly,” a nickel trader source based in northern China said.

LME’s three-month nickel futures closed at $23,040/t on Tuesday, and the price touched $22,684/t on the Friday March 10 close, well below the $23,000/t level. In comparison, the three-month nickel futures closed at $24,890/t on Wednesday March 1.

The most-traded nickel futures on SHFE closed at 177,570 yuan/t, compared with 195,620 yuan/t on March 1.

The sharp drop was an alarm bell for some market participants; it underlined the risk of nickel trade. This has been a factor as to why market activities have remained sluggish, sources said.

“The prices dropped way faster than we expected, and we think it’s not normal,” a nickel trader source based in eastern China said.

Meanwhile, some market participants were still focused on nailing down long-term contracts with Russia producer Norlisk, but progress has varied, sources said.

“Some participants have come very close to clinching a long-term contract with small volumes priced with a mix of SHFE and LME nickel prices, but big players, especially stainless steel mills, made little progress, because they want big-volume contracts, fully priced with SHFE nickel price,” a nickel trader source told Fastmarkets.

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