Nickel prices are weak in August

Abstract China's official PMI index fell short of expectations, raising concerns about whether demand could be boosted. On Monday, Shanghai's main nickel 1509 contract suffered a setback, closing down 1.76% to 80,340 yuan / ton. It continued to fall 0.84% ​​on Tuesday. For the recent trend of weak nickel prices, silver...
China's official PMI index fell short of expectations, raising concerns about whether demand could be boosted. On Monday, Shanghai's main nickel 1509 contract suffered a setback, closing down 1.76% to 80,340 yuan / ton. It continued to fall 0.84% ​​on Tuesday.

For the recent weak nickel price, Galaxy Futures analyst Li Ying said that the main reason is the change in macro news. The latest official China manufacturing PMI in July was 50.0, which is less than expected, suggesting that the downward pressure on China's economic growth is still relatively large. . "This has caused, to a certain extent, concerns about whether China's demand can be boosted, which has led to a decline in the entire line of non-ferrous metals."

The National Bureau of Statistics Service Industry Research Center and the China Federation of Logistics and Purchasing announced on August 1 that in July 2015, the China Manufacturing Purchasing Managers Index (PMI) was 50.0%, down 0.2 percentage points from June, less than the previous market 50.1. It is expected that once again, the market will be at a critical point, and this is the first time that the data has fallen since it maintained its upward trend in March this year.

“In the near stage, domestic financial assets fluctuated weakly, commodity markets were under pressure, and nickel market volatility was magnified by capital and market sentiment.” Guo Feng futures analyst Gu Fengda said that from the cycle point of view, non-ferrous metals and other commodities have ended. The “Golden Decade” is in a bear market cycle, and it is difficult for industry capacity growth to turn around quickly, while downstream consumption growth is languishing.

The spot market also showed a continuous decline. According to the Fubao Information Transaction Express, on August 4, the nickel continued to decline. The Shanghai spot market Jinchuan Nickel was quoted at around 80,900 yuan/ton, and the Russian nickel was quoted at around 80,200 yuan/ton. Nickel prices in the spot market fell, and the transaction was not good.

Fortunately, the tightening of supply has slightly eased the pressure on the nickel market. According to Moscow July 31, one of the world's largest nickel and palladium producers, Norilsk Nickel, said on Friday that the company's nickel production in the second quarter was about 64,000. In the second quarter, nickel production decreased by 5% from the first quarter. According to Mirabela Nickel, the Santa Rita mining operation will slow down from August 14, but the company's full-year production target for 2015 will remain unchanged at 16,500-18,000 tons. In addition, nickel ore in the Philippines, Myanmar and other countries maintained a small increase in production. The Indonesian ferronickel project was slowed down by the low nickel price. The total supply of nickel ore in July fell. As of the end of last week, the inventory of LME nickel was 460,098 tons, and the inventory of nickel in the previous period was 14,818 tons. The inventory increased compared with the previous week, and the high position was stable.

"At present, the fundamental logic of the nickel market has not changed: supply tightening, demand shrinking, weak supply and demand, leading to weak nickel prices." Li Ying believes that the follow-up should focus on the timing of US interest rate hikes and the stabilization of China's economy. The supply elasticity of the nickel market and the response to changes in demand elasticity are not sensitive.

Gu Fengda expects that the domestic nickel market is building the bottom. The short-term market focus will focus on macro-policy and financial market stability. Capital and emotional changes will amplify market volatility, and investors should not rush to the bottom.

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