US nickel premiums continue decline; steady in Europe and Asia

Spot market premiums for refined nickel products declined sharply in the US following a long period of stagnation. Elsewhere, premiums were stable while Chinese markets re-opened following the Lunar New Year holiday

Read the latest insights into the nickel market from our price reporting team below.

United States

US refined nickel premiums continued their decline into the beginning of February.

Fastmarkets assessed the nickel briquette premium, delivered Midwest US at 80-125 cents per lb on Tuesday January 31, a significant decline over the previous week’s 90-150 cent per lb assessment.

While briquette inquiries continued to stack up, trading volumes cooled. No deals were reported this past week.

Price opinions steadily decreased, with traders, producers and consumers providing lower quotes.

While forward-looking demand seems to be picking up a bit, US steel producers are well-supplied for the first quarter. The near-term demand outlook is hazy at present, with sources providing mixed opinions.

One trader commented on this week’s movement, saying, “we are seeing max call-offs from our min/max briquette contracts and some decent spot demand too.”

Others were less bullish, with another trader commenting, “we have not had any spot business and it is really quiet out there, so it is hard to say where things are right now.”

Notably, sources continued to disagree somewhat as to whether the briquette and 4×4 markets were still in parity or not.

Sale data from the previous week made it clear that cathodes were once again trading at a premium to briquettes, which is historically typical, but this week quotations seemed to fall back into parity.

Fastmarkets assessed the nickel 4×4 cathode premium, delivered Midwest US at 80-120 cents per lb on Tuesday, a significant decline from the previous week’s 110-150 cent per lb assessment.

As with briquettes, Fastmarkets sources agreed that premiums have come off from previous levels. However, cathodes continue to have tighter supply and comparatively weaker demand than briquettes.

Europe

Spot premiums in Europe for refined nickel products were steady in the week to January 31, with spot market activity limited in the region.

Premium ranges for material remained persistently wide while participants continued to note differences in valuations for certain brands of material, with European-produced material for products such as cathode still able to achieve higher premiums.

Following the previous week’s decline, briquette premiums stabilized with participants estimating the current levels as reflective of the market.

Fastmarkets assessed the nickel briquette premium, in-whs Rotterdam at $450-750 per tonne on January 31, unchanged from the previous week.

Offers and liquidity were reported to Fastmarkets just above the current range but fell outside of our methodology and were therefore not reflected within the assessment.

Participants noted that demand for nickel briquettes was weak within the region, with consumers reportedly well covered for material.

Uncut cathode premiums were also flat on Tuesday, with participants noting that current market fundamentals remain unchanged, with supply for premium brands of material remaining tight.

Fastmarkets assessed the nickel uncut cathode premium, in-whs Rotterdam at $400-850 per tonne on January 31, unchanged from the previous week.

Rounding out the premiums, 4×4 cathodes were also unchanged in Europe.

Thin availability of cathodes in the region, plus constrained cutting capacity, continues 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 from a week prior.

Total stocks for nickel remain tight in London Metal Exchange warehouses, with just 42,774 tonnes available on warrant. However, these warrants are also tightly held, increasing the sense of tightness within the market.

LME data shows that two parties have large warrant holding positions, one at 30-39% and a second at 40-49%.

China

Premiums of nickel full plate imported into China were unchanged amid quiet post-holiday market conditions in the week to Tuesday.

Most price indications remained in the same range, with an offer for Russian materials quoted at $250-300 per tonne, but no subsequent deal was heard.

Fastmarkets assessed the nickel min 99.8% full plate premium, cif Shanghai at $250-350 per tonne on Tuesday, and the corresponding assessment for nickel min 99.8% full pate premium in-whs Shanghai was also $250-350 per tonne. Both premiums were unchanged since January 10.

The return of market participants from the Lunar New Year holiday has not revived the market, with nickel prices on the LME above $29,000 per tonne, leaving spot trades on the sidelines.

“We are still reacting to the Tsingshan news on the potential supply, plus the unprofitable import terms, so we won’t bother to do any trades,” a trader source said.

Nickel briquette premiums were also unchanged over the pricing month in an “even quieter” market, sources said.

Fastmarkets assessed the nickel min 99.8% briquette premium, cif Shanghai at $0-130 per tonne, unchanged on a monthly basis.

Briquettes are facing challenges from both lingering import loss and alternatives, making them less desirable, market participants said.

“With cheaper alternatives such as MHP, people don’t need briquettes to make batteries now,” a trader source said, adding that no one would buy briquettes except for delivery purposes.

To get more of the latest market intelligence and insights on the nickel market, visit our dedicated nickel market page here.

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