1. Trend analysis
The domestic nickel market will rise sharply in 2021. At the beginning of 2021, the nickel price will be 128,133.33 yuan/ton, and at the end of the year will rise to 150,400 yuan/ton, an increase of 17.38%. Looking at the trend of nickel throughout the year, the price of nickel first fell to the lowest price of 120816.67 yuan/ton on April 21, and then rose to the highest price of 159866.67 yuan/ton on October 16, with an amplitude of 32.32%.
The current trend of nickel in 2021 is basically the same, and the futures price is very close to the spot price. Towards the end of the year, the spreads widened and the main basis was at a positive value, which is a negative for buying hedging.
2. Market analysis
In 2021, nickel prices will be divided into four stages:
Slight increase (end of January-February): At the end of January-February, it was the Chinese New Year. After the Spring Festival, downstream production and work resumed, demand increased, and nickel prices rose slightly.
Cliff fell (end of February-end of April): On March 3, a blockbuster news was released on the market that Qingshan Industrial, Huayou Cobalt and Zhongwei Co., Ltd. signed a high-battery nickel supply agreement. The three parties jointly agreed that Tsingshan Industrial will supply 60,000 tons of high matte nickel to Huayou Cobalt and 40,000 tons of high matte to Zhongwei within one year starting from October 2021. The economic efficiency of producing nickel sulfate with high matte is better than the economics of producing nickel sulfate with nickel beans, and it is in a competitive relationship with nickel. Therefore, the successful trial production of high matte threatens the underlying logic of nickel’s fundamentals and severely hits the nickel market. Nickel has fallen sharply.
All the way up (end of April to beginning of September): Although the high nickel matte incident caused a sharp drop in nickel prices, due to the time required for implementation, and the uncertainty of the scale of production and delivery, everyone gradually consumed the news, and the nickel market resumed. Back to fundamentals. In terms of supply, the supply of nickel ore continues to be disrupted. Vale has suspended the operation of nickel mines in Sudbury, Canada due to the breakdown of labor-management negotiations. Affected by the weather and the epidemic, shipments from the Philippines are relatively small. The pressure at the distal end of the nickel supply end is relatively high. On the demand side, the development of the new energy industry boosts the demand for nickel, and the demand for new energy is at a relatively high level.
Wide fluctuations (early September-end of the year): In the fourth quarter, the supply of nickel ore was still tight, and the global nickel supply was in short supply. Nickel ore giants all reduced production to varying degrees. However, due to domestic production and electricity restrictions, demand was poor, and both supply and demand were weak. Under the circumstances, nickel prices fluctuated at a high level.To sum up, due to the ample global liquidity, the continuous decline in visible inventories and the shortage of nickel supply, nickel prices are showing an upward trend as a whole. In 2022, global liquidity may tighten, domestic energy consumption dual control will be loosened, and demand will increase. The green demand for new energy is still improving, but the impact of high nickel matte may be even greater, and the supply tends to be loose. With both supply and demand booming, the price of nickel in 2022 is expected to be weaker than in 2021, and the price range is 130,000-150,000 yuan/ton.