1、 Trend analysis

 

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In 2020, the domestic nickel market will fall first and then rise. According to the data monitoring of business society, the nickel price will be 113733.33 yuan / ton at the beginning of 2020, and will rise to 130700 yuan / ton at the end of 2020, with an increase of 14.92%. Looking at the trend of nickel in the whole year, the nickel price first fell to the lowest price of 92050 yuan / ton on April 2, and then rose to the highest price of 132750 yuan / ton on December 14, with an amplitude of 44.21%.

 

According to the comparison chart of nickel current period of business cooperatives, the trend of nickel current period in 2020 is basically the same, and the futures price is very close to the spot price. Near the end of the year, the spread expands and the main basis is positive, which is bad for buying hedging.

 

2、 Market analysis

 

From January to early April, due to the impact of the epidemic situation, domestic production and resumption of work were slow, and enterprises almost stagnated. In particular, the demand of downstream civilian areas of terminals was obviously affected by the epidemic situation of coronavirus infection, including stainless steel products (construction, decoration, tableware, equipment), electroplating (cars and bathrooms), batteries (cars, 3C digital), which led to repeated nickel prices fall.

 

Nickel prices rose sharply (early April to December): at the beginning of April, with the resumption of production by domestic enterprises, nickel mines in the Philippines decreased, the decrease in supply was more clear than that in the earlier period, and the demand increased. Nickel prices began to rise slowly. Due to the epidemic situation, several major mining areas in the Philippines were closed down gradually, and the shipment ban was delayed from the initial April 18 to the end of April. Later, the blockade was extended to August 18 again. As China’s largest nickel exporter, the Philippines continued to rise due to the decline of nickel supply. In December, Indonesia’s ore price rose and the Philippines’ mine delivery dropped seasonally. In addition, the recent frequent support policies for new energy around the world, the market’s enthusiasm for nickel for new energy rose again, and the nickel price rose to the highest price of the whole year.

 

Import and export of nickel in 2010-2020

 

From 2010 to 2013, the net import of nickel increased year by year, and from 2013 to 2020, the net import of nickel decreased year by year. In November 2020, China imported 12873 tons of refined nickel (unwrought and rolled non alloy nickel and other unwrought and rolled non alloy nickel with total nickel and cobalt content ≥ 99.99% and cobalt content ≤ 0.005%), with a month on month growth of 53% and a year-on-year growth of 80.38%. Among them, the proportion of other unwrought alloy nickel was 91.25%, accounting for 11747 tons, an increase of 4095 tons compared with October; while the proportion of unwrought non alloy nickel with total nickel and cobalt content ≥ 99.99% and cobalt ≤ 0.005% was about 1126.9 tons, an increase of 365 tons compared with October. In 2020, the annual import volume of nickel is estimated to be 129700 tons, and the export volume is 19600 tons.

 

Global nickel and China’s nickel production in 2010-2020

 

Compared with 2018 and 2019, global nickel production in 2020 will decrease slightly, while China’s nickel production will increase slightly. From January to October 2020, the global output of refined nickel is 1.9586 million tons, and the demand is 1.8949 million tons. In November 2020, China’s Refined Nickel output was 13667 tons, with a month on month increase of 10.7% and a year-on-year decrease of 6.9%. From January to November 2020, China will produce 150500 tons of refined nickel, an increase of 2.9% year on year. The annual output is expected to reach 164000 tons, an increase of 1.2% year on year.

 

Apparent consumption of nickel in 2010-2020

 

The apparent consumption of nickel in China from January to October 2020 is 2368200 tons, which is lower than that in 2019.

 

Downstream consumption

 

The consumption of nickel mainly depends on stainless steel. 80% of nickel in China is used for forging stainless steel. In 2020, the consumption of primary nickel is expected to reach 1.4 million tons, an increase of 11.1% year on year. In the next few years, the growth rate of nickel driven by new energy is expected to be only 8%.

 

Trend of downstream stainless steel

 

According to the price monitoring of the business society, the price of stainless steel at the beginning of the year was 133663.67 yuan / ton, and it dropped slightly by 1.12% to 13216.67 yuan / ton at the end of the year. The lowest price of the year was 11491.67 yuan / ton on March 30, and the highest price was 13808.33 yuan / ton on September 7, with an amplitude of 20.15%. According to the price comparison chart of the business community, before October 15, the price trend of stainless steel and nickel was basically the same. After that, the price of nickel and stainless steel deviated. The main reason was that the Philippine mining area entered the rainy season in November, which intensified the tension of nickel supply. Combined with Indonesia’s export ban policy, the nickel raw material end was tight, and the nickel price soared sharply. However, due to the weak downstream demand and high inventory of stainless steel, it has not been pulled up for a long time.

 

The “head effect” of China’s new energy vehicle industry appears

 

Since last year, China’s new energy vehicle production and sales have declined due to the overall downturn of the automobile industry, the decline of subsidy policy, and the advance overdraft of shared travel and other operating vehicle markets, which has hindered the development of the industry. However, driven by a number of “leading enterprises”, the production and sales of new energy vehicles are back on the fast track. In September, the sales of new energy vehicles across the country increased by 67.7% year-on-year. Industry insiders said that the new energy vehicle industry is turning to a “self growth” stage driven by technology upgrading and industrial chain improvement.

 

To sum up, in 2020, nickel was first suppressed and then increased. In the first quarter, it fell to the lowest price due to the epidemic situation, and then rose sharply due to the supply shortage. According to statistics, the import and export volume, output and apparent consumption of nickel in 2020 have decreased to varying degrees, so the overall performance is not as good as that in 2019. Indonesia’s ore ban policy will not change in the short term, while the nickel mine in the Philippines is limited by the rainy season. Therefore, the supply of nickel mine is expected to be stretched before the second quarter, and the port inventory is also low. It is expected that the tense situation of nickel in 2021 will continue from the first quarter to the second quarter, but there are still a large number of new production capacity expected to be put into operation in the downstream stainless steel industry. The new energy vehicle market is expected to be better, and it will remain stable in 2021 However, the overall center of gravity may be higher than that in 2020, and the price range is 120000-150000 yuan / ton.

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