The price spread between Jinchuan and Norilsk nickel widened from the start of July as prices of Norilsk nickel fell when part of its demand shifted to nickel briquette.
From the start of July through to August 21, the spread widened from the usual 500 yuan/mt to around 1,400 yuan/mt.
Lower-priced nickel briquette attracted greater interest than Norilsk nickel as, most nickel sulphate and ternary precursor producers were keen to destock raw material supplies of nickel briquette from July.
In July, nickel future prices at Wuxi Stainless Steel Exchange began to dip while Norilsk nickel premiums remained little changed as more imported materials entered the domestic market. This also lowered prices of Norilsk nickel. As the market declined, producers of Jinchuan nickel held back sales and this grew premiums.
SMM believes that the price gap may widen further to 1,500-1,700 yuan/mt in the near future, as growing imports of Norilsk nickel weigh on premiums.
Premiums of Jinchuan nickel are likely to hold steady at 1,600-1,900 yuan/mt over nickel prices at the Wuxi Stainless Steel Exchange.