SMM

SHANGHAI, Jan 9 (SMM) - SHFE nickel lost nearly 10% last week owing to the frequent events on the macro and news front. US Fed's Bullard made a speech and hinted that the final value of 5.1% at the end of this round of rate hikes may be sufficient to control the US inflation, which suggests that the Fed will raise the interest rates by at least 75 basis points in the next few months. The speech also conveys the US Fed's determination to control inflation in 2023. Market fears of an economic recession intensified, which was bearish for commodity prices. On the news front, according to SMM research, Tsingshan Group will take the first batch of electrodeposited nickel, processed by a new energy company in Hubei, off the production line in January. And the project's designed monthly capacity is 1,500 mt, which has been officially put into production. Recently, nickel prices have remained high amid the shortage of deliverable products, and the prices were unlikely to fall owing to the lack of confidence among shorts. However, the prices fell somewhat due to news of Tsingshan Group's release of some refined nickel into the market. From the second half of 2022 to the beginning of 2023, Huayou and Tsingshan Group's new refining capacities have been put into production, which alleviated the market's concerns about the shortage of deliverable refined nickel in the future. In the follow-up stage, the pure nickel supply will grow further as the productions lines of refined nickel totalling 78,000 mt/year owned by Huayou and Tsingshan are under construction, which will push up the global visible inventory of pure nickel and is bearish for nickel prices. The spot trading improved palpably last week when nickel prices fell, and it encouraged many downstream companies to restock pure nickel approaching the Chinese New Year. In general, the supply tightness of pure nickel will ease. SMM expects that the nickel price will remain rangebound with some declines.