Jinchuan limits nickel price rise to 4%

China’s largest nickel producer Jinchuan Group raised its benchmark nickel price by 4 percent on Tuesday in the wake of LME gains and in a quiet Chinese market.

This takes the new benchmark ex-works price to 247,000 yuan ($34,750) per tonne, up 9,000 yuan per tonne from the last offer, which had been unchanged for around two months.

“The price adjustment was because of the recent LME nickel price hike as well as Chinese spot price changes, although Jinchuan’s price increase appears comparatively modest,” said a Shanghai-based trader.
 
Three-month nickel closed at $32,845 per tonne in the official session at LME on Tuesday, up 13.5 percent from two months earlier. 

Nickel prices on the Chinese spot market increased by 11 percent in the past two months to 267,000 yuan per tonne on Wednesday, according to data from Changjiang Nonferrous Spot Market.

“Subdued domestic demand could be the reason for Jinchuan’s limited price move. Spot market transactions are pretty slow right now and nickel stocks remain high out in the market,” said a trader from Tianjin.

Downstream demand for stainless steel has not completely recovered, and stainless mills are still cautious on buying, said a second trader in Shanghai.

“A lot of people believe the strong nickel market is a short-term situation. [The mills] would rather wait for a while for nickel prices to decline again, especially as current high offers make stainless production unprofitable,” he added.

“Everything depends on downstream demand for stainless steel. Whether the stainless consumption will get better or not will finally determine the stainless market as well as the stainless raw materials markets.”