During the Chinese New Year holiday, the Shanghai Futures Exchange was closed, and trading of nickel on the Shanghai Futures Exchange was suspended. Meanwhile, the nickel price on the LME fluctuated but remained strong, and it was at US $17,435/tonne as of the close on February 20.
With refined nickel traders in China generally on holiday, and there are basically no trading activities in the market. Looking back at the market before the holiday, due to the overall abundant supply of spot goods, downstream Chinese enterprises had a weak willingness to stock up and mostly purchased according to the production schedule. The spot transactions of refined nickel were lackluster in the first half of the month. Towards the end of the month, the monthly spread on SHFE nickel widened. Some small and medium-sized traders, after rolling their positions, offered material at lower premiums/discounts. Market transactions were dominated by lower-priced resources, making it difficult to conclude deals at conventional offer levels. Most of the transactions are preliminary orders and long-term contract pricing, while spot transactions are gradually weakening, with spot market activity gradually cooling.
During the CNY holiday, small nickel enterprises in various regions suspended production for the break, while most large and medium-sized refined nickel producers continued normal operations. However, due to fewer working days, China's estimated refined nickel production for February stands at 32,260 tonnes, down 8.42% month-on-month and 2.68% year-on-year. The spot resources produced during the holiday will arrive centrally after the break. Jinchuan resources are expected to remain tight in the first week post-holiday, but after approximately four days of transportation, spot availability in East China markets will gradually become sufficient, leading to a retreat in spot premiums. Domestic electrowinng nickel brands such as Huayou and GEM have ample spot supply, and their premium/discount fluctuations are expected to be limited. Arrivals for both Norwegian and Sumitomo resources are scheduled for early March. Given currently low market inventories, their premiums are expected to remain relatively high post-holiday.
Source: Mysteel
During the holiday, a landslide accident occurred in the tailings area of Indonesia's IMIP industrial park. Operations in the affected area were suspended, but it has not yet had a significant impact on the overall supply. Chen Xuesen, Vice President of the China Nonferrous Metals Industry Association, recently stated that the nonferrous metals industry is expected to continue its stable performance from the end of 2025 into the first quarter, and it will maintain steady growth this year. Specifically, production is expected to continue its stable operation this year, with the industrial value-added of the nonferrous metals sector projected to grow by around 5% year-on-year. Industry revenue and profits are expected to maintain growth, while investment will continue to increase, though import and export trade may face challenges. In the investment sector, downstream demand for nickel, cobalt, and lithium from photovoltaic, wind power, and lithium battery sectors continues to rise. Coupled with the implementation of national consumption promotion policies, fixed asset investment in the nonferrous metals industry is expected to maintain growth.
Written by Cora Ji, jiruyan@mysteel.com
