Stainless steel prices fluctuate weakly, and spot transactions are scarce
Nickel variety:
Yesterday, nickel prices fluctuated weakly during the day and rebounded slightly at night. Transactions in the Spot market were average. Jinchuan’s nickel supply was tight and the premium was stronger. Russian nickel traders were more willing to ship, the spot premium continued to decline, and the premium of nickel beans remained low. According to SMM data, yesterday Jinchuan nickel premium increased by 800 yuan/ton to 9700 yuan/ton, imported nickel premium decreased by 150 yuan/ton to 950 yuan/ton, and nickel bean premium remained unchanged at 300 yuan/ton. Yesterday, Shanghai Nickel (158860, 1710.00, 1.09%) warehouse receipts decreased by 117 tons to 1059 tons, and LME nickel inventory decreased by 444 tons to 38904 tons.
Nickel perspective:
Nickel is in a pattern of low inventory, high profits, and weak expectations. The supply and demand of nickel in the central line are bearish. Currently, nickel production capacity is in a high profit state, stimulating rapid supply growth. In the later stage, there is a significant increase in the supply of pure nickel, nickel iron, and nickel intermediate products. The primary nickel is transitioning from structural surplus to comprehensive surplus, and the nickel central line hedging maintains a bearish mentality when facing high prices. However, due to the fact that global refined nickel inventory is still at a historical low, and the elasticity of nickel price rise is relatively high, there is still uncertainty in short-term macroeconomic sentiment. Nickel prices may remain weak and volatile, so it is recommended to temporarily wait and see.
Nickel strategy:
Neutral.
Risk:
The capital game under low inventory and changes in the supply of nickel major producing countries.
304 stainless steel variety:
Yesterday, the price of stainless steel futures was weak and volatile, and the spot price was slightly lowered. The basis was at the middle level. The Spot market transactions were still light, and the downstream purchase intention was insufficient. Yesterday, the stainless steel basis difference in the Wuxi market increased by 70 yuan/ton to 595 yuan/ton, while the stainless steel basis difference in the Foshan market increased by 70 yuan/ton to 445 yuan/ton, and the SS futures warehouse receipt decreased by 835 tons to 26144 tons. According to SMM data, the average factory price of high nickel pig iron, including tax, remained unchanged at 1070 yuan per nickel point yesterday.
■ Stainless steel perspective:
304 stainless steel is in a pattern of increasing supply, neutral consumption, and weak cost neutrality. In June, the production of 300 series stainless steel was at a high level, while the performance of terminal consumption was average. Moreover, the high profit status of nickel iron combined with the continuous expansion of new production capacity may lead to a downward trend in the price center of nickel iron in the later stage, and the upward space for stainless steel prices is limited. However, at present, the contradiction between stainless steel itself is not prominent, and inventory is at a medium to low level. Under the current price, stainless steel prices have insufficient initiative to decline, and may operate in the short term or in a volatile manner. In the future, we will treat it with the idea of selling short every high.
■ Stainless steel strategy:
Neutral.
Risk:
Policy changes in Indonesia, supply growth less than expected, and improvement in stainless steel consumption exceeding expectations.
Stainless steel prices fluctuate weakly, and spot transactions are scarce
