Refined nickel premiums flat globally amid seasonal lull

Refined nickel premiums remained stable globally in quiet market conditions during the holiday season at the end of December 2022

Refined nickel premiums remained stable over the Christmas period with quiet conditions reported in the markets. Key takeaways from the period include:

  • Positive signals seen for briquette demand in Europe
  • Business slows globally on seasonal lull
  • Nickel bonded stock volumes in Shanghai rose in December.

European spot premiums for refined nickel ‘steady’

Premiums for refined nickel products in Europe on a spot basis were steady in the week to Tuesday January 3. There was thin liquidity in the market with the region remaining in a seasonal lull, and with participants only just returning to the market following the Christmas and new year holidays.

Although many of the fundamentals were unchanged at the start of this year, market participants continued to see wide ranges in premiums for nickel products, with valuations for different brands of material continuing to diverge.

In the briquettes market in Europe, some participants have begun to see the market rise, with assessments moving closer to $1,000 per tonne, citing positive demand signals. But no liquidity at such levels has been observed, preventing any move in the premiums for now.

Fastmarkets assessed the nickel briquette premium, in-whs Rotterdam, at $500-850 per tonne on January 3, unchanged from the previous week.

Market participants continued to monitor the situation in China regarding the use of nickel metal, with briquette premiums in the region coming under significant pressure while the battery industry in the country turned to the use of intermediate products such as mixed hydroxide precipitate (MHP) in the production of nickel sulfate.

There was a growing expectation that the availability of briquettes would improve globally as a result, although nickel metal was likely to continue to play an important role in the battery industry.

Elsewhere, premiums for nickel 4×4 cathodes were also unchanged amid a lack of fresh liquidity.

Fastmarkets assessed the nickel 4×4 cathode premium, in-whs Rotterdam, at $800-1,300 per tonne on Tuesday, unchanged since early December.

The availability of 4×4 cathodes remained thin in the region, which continued to sustain premiums at historically high levels.

Fastmarkets assessed the corresponding nickel uncut cathode premium, in-whs Rotterdam, at $400-800 per tonne on January 3, unchanged since mid-October.

Covid 19 and seasonal lull dampen sentiment in China

Premiums for nickel full plate imported into China were unchanged in the absence of spot activity in the week to Tuesday.

Fastmarkets assessed the nickel min 99.8% full plate premium, cif Shanghai, at $350-450 per tonne on January 3, unchanged since September 20.

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

The arbitrage loss increased, while the nationwide rise in Covid-19 case numbers and the seasonal lull for new year holidays combined to damp buying sentiment, leading to thin liquidity, Fastmarkets learnt.

“The nickel import loss is still too high, so materials could not be imported,” a Shanghai-based trader said. “The materials are all piling up in bonded warehouses.”

The weekly-average nickel import arbitrage was at a loss of $1,017.30 per tonne in the week to December 30, against $884.06 per tonne a week earlier.

The lackluster demand was also evidenced by the build-up in bonded stocks. Fastmarkets assessed bonded nickel stocks in Shanghai at 6,100-13,200 tonnes on December 30, an increase of 35% month on month but down by 17.2% year-on-year.

US nickel premiums ‘flat’ as market participants return after holiday season

US nickel premiums were flat again in the week to January 3. Spot activity remained quiet at the start of the new year.

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

And the nickel 4×4 cathode premium, delivered Midwest US, was also assessed at 120-180 cents per lb on Tuesday, similarly unchanged since late September.

Price opinions were level across the board over the week and activity was subdued.

“Many market participants will not be back until next week. We need a few days of trading to see where we are physically,” one trader said.

“Nothing is going on right now. We’re all just waiting to see what will happen,” another trader said.

Market sources continued to report that long-term contract negotiations were at a standstill. Despite the lull, most believed that market activity would resume in the next several weeks.

To keep track of all the latest developments in the nickel market, head to our dedicated nickel market page.

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