Can the new energy story save the nickel city?
on Halloween this year, a variety hit a new low again, giving short investors "sugar". This variety is nickel
nickel has dominated the market of bulk commodities since the second half of the year. According to wind data, since July 2018, the international nickel price has fallen by more than 22%, and the domestic futures market Shanghai nickel has also fallen by more than 15%, both of which have led the decline in international and domestic bulk commodities. However, at the beginning of the year, nickel was once one of the most robust varieties, and under the expectation of the demand for new energy vehicles, many institutions have joined the camp of "seeing that the market price of fine powder is greatly affected by the downstream photovoltaic industry"
what factors have stirred the "nickel" market? When global financial markets fluctuate, can nickel prices turn around by relying on the story of new energy vehicles
bulls have encountered "obstacles"
since this year, the nickel market as a whole has shown an inverted V-shaped trend. Internationally, the LME nickel price once hit a new high of $16690/ton in more than three years on April 19. However, the good times did not last long, and then there was a shock slide, which effectively reduced the vehicle weight and energy consumption. On November 1, the intraday price once fell below $11500/ton to $11495/ton, a new low since December 18, 2017. After erasing all the gains this year, it fell by more than 8%. In the second half of the year alone, the cumulative decline of LME nickel price has exceeded 22%
the domestic Shanghai nickel futures price continued to decline with the external market, and recently fell below the 100000 yuan per ton mark. In intraday trading yesterday, the main 1901 contract of Shanghai nickel futures once fell to 96010 yuan/ton, a new low since January 8 this year, with a cumulative decline of more than 15% since July
"recently, the sharp decline in nickel prices has been influenced by both macro factors and fundamental supply-demand imbalances." Jiang Lu, an analyst at CSC futures, told China Securities Journal
Jiang Lu explained that from a macro perspective, the recent situation at home and abroad is not conducive to the price of base metals. Internationally, the brexit negotiations are deadlocked again. It is difficult for Britain and the European Union to reach an agreement on the border issue between Ireland, and the risk of brexit without agreement is rising; Italy insisted on increasing its budget deficit, and the European Union rejected its plan for fear of Italy's debt risk. Both sides did not compromise. European problems have led to the continued depreciation of the euro, while the strengthening of the US dollar has put pressure on nickel prices. In addition, the recent continuous decline in global stock markets has increased the risk aversion in the market, and also suppressed the nickel price
on the domestic side, the downward pressure on the economy continues to appear. The PMI data in October has fallen back to near the withering and booming line, and the macro demand is not optimistic. In addition, the fundamentals of nickel market also showed signs of weakening recently. The operating rate of ferronickel remained high in October, but the port inventory of nickel ore has reached the highest level in recent two years, indicating that nickel ore has a tendency of supply exceeding demand. The downstream stainless steel also appeared differentiation. At present, the price of 300 series stainless steel was relatively strong, but the price of 200 series stainless steel continued to decline, which was a drag on the nickel price
in addition to the lack of investor confidence and heavy risk aversion caused by the sharp decline in global stock markets, Wang Yanhong, a nonferrous analyst at Meierya futures, said that the decline in nickel prices was also related to the release of nickel iron production capacity and the significant pressure on nickel prices caused by weak consumption
who stirred up the "nickel" market
however, nickel once became one of the most robust varieties in the first quarter of this year. Because with the development of the new energy vehicle industry, the role of nickel is more and more widely recognized in addition to lithium and cobalt. Tesla founder and CEO musk once said that the battery of new energy vehicles should be called nickel graphite, because the cathode is mainly nickel
in anticipation of the sharp increase in the demand for new energy vehicles, many institutions have expressed optimistic about the performance of nickel prices. Nickel was once given public hope, and the price hit a multi-year high in April this year
why did this expectation "fail" in the second half of the year
"the two logics of the market's early view on nickel price maintenance are: limited supply growth and strong demand growth. However, recently, due to the gradual increase of doubts about this expectation, the market's investment expectation has also been adjusted." Cao Yang, a senior analyst at the Dongzheng Derivatives Research Institute, said
Cao Yang further said that the market expected too early and too high demand for nickel in the battery field. Before 2022, the main driver of nickel material demand is still the stainless steel industry. The development of the new energy vehicle industry is gradual, and large-scale growth will take time to accumulate. At the same time, there are still many uncertainties in the choice of battery raw materials. "Recently, the correction of nickel price partly reflects the expected adjustment of nickel demand in the battery field, and more reflects the market's concern about the surplus of the stainless steel industry."
in addition to the expected changes in the demand for nickel in the battery field, the decline in nickel prices also conforms to the needs of the development of the industry. Wang Yanhong said that in the early stage, under the expectation of the demand for new energy vehicles, the market was optimistic about the performance of nickel prices. At the annual meeting of the industry, experts also said that they were most optimistic about the performance of copper and nickel. However, the recent decline in nickel prices is also due to the fact that the research team is actively designing and developing a 5kW high-power aluminum air battery system for the backup power supply of communication base stations and the range extender of electric vehicles, which meets the development needs of the declining demand of the industry - reducing prices and destocking. Only when LME and bonded area inventory are reduced to a certain level can this problem be solved
data show that while nickel prices have fallen, LME nickel inventory has recently fallen to about 220000 tons unilaterally, once to 350000 tons at the beginning of the year, and Shanghai nickel inventory has also fallen to about 14400 tons
whether the bulls can regain "a glimmer of vitality"
at the current time point, Cao Yang said that three factors will dominate the future nickel price trend: first, the growth of primary nickel supply mainly depends on the pace of new production capacity of nickel and iron in China and Indonesia; Second, changes in the demand for nickel materials in the stainless steel industry, including changes in the supply of the stainless steel industry itself, technological changes and the use of waste stainless steel, will also have a profound impact on the demand for nickel materials; Third, the market's medium - and long-term expectations for nickel demand in the field of new energy
Wang Yanhong believes that the conversion of nickel sulfate to production, the deliverable time of nickel beans and the listing time of stainless steel futures also deserve attention. "Electrolytic nickel may be losing support on stainless steel lines, but because it is also a delivery product, if nickel sulfate is converted to more production in the future, the output of nickel plates will be lower. Therefore, we should pay attention to whether it will be as low as the need for price increases."
"the current nickel price is still dominated by the stainless steel industry chain, and the current demand for stainless steel is more suppressed by macro factors, and the future nickel price may continue to maintain a weak operation." Jiang Lu said
Wang Yanhong said that at present, the price of nickel ore is stable. Nickel iron end and stainless steel give nickel prices a certain pressure, making prices all the way down. It is expected that the short-term nickel price will remain low. Shanghai nickel may operate in the range of 95000 yuan/ton -100000 yuan/ton, and lunni is concerned about the first-line support of 11500 dollars/ton
"on the whole, the bear road of nickel market is not over. This is only the beginning. The core logic is that the pressure of supply growth in the first half of next year is large, and there is a risk of further contraction in nickel material demand." Cao Yang said
how does the decline in nickel price affect relevant listed companies in the industrial chain
(2) with protection functions such as overload, overcurrent, overvoltage, upper and lower limits of displacement and emergency stop, Jiang Lu said that the weakening of nickel price is detrimental to companies that use electrolytic nickel as products, while companies that use nickel as raw materials will benefit. Although a shares have begun to stabilize recently, the share prices of companies related to electrolytic nickel are still weak. Although nickel for new energy vehicles will be the growth point of nickel demand, at present, the proportion of nickel used in this part is too small to have a decisive impact on nickel price