As an important part of stainless steel, the content of nickel in 304 stainless steel reaches 8%. Because the price is more expensive than another important raw material iron, nickel accounts for more than 55% of the cost of stainless steel. Therefore, the fluctuation of nickel price has also become a bellwether for the price of stainless steel.

The downstream industry is suffering from "leftover nickel"

On the morning of March 8, the main stainless steel contracts in the domestic futures market were directly closed at the daily limit, and the price of stainless steel in the spot market also stood at the 20,000 yuan mark.

According to the data of the business agency, the spot price of stainless steel was reported at 20,073.33 yuan/ton on the 8th, up 4.15% in a single day. According to my steel network data, in the morning of March 7, the price of 304 stainless steel has been raised by 300~600 yuan / ton in various places. Affected by the fluctuation of upstream raw material prices, the Wuxi Stainless Steel Electronic Trading Center even issued a notice on the suspension of nickel trading on March 8.

"The price of stainless steel has risen sharply, but some traders are reluctant to sell because the shortage of resources is difficult to relieve in the short term, and some do not offer quotations. It is difficult for the downstream to adapt for a while." Liu Meili of the business agency analyzed that last week, the stainless steel community inventory appeared to go to the warehouse, and the transaction has picked up. There are many new stainless steel production capacity this year. The crude steel production schedule in March increased by 20.4% month-on-month, and the supply of steel mills is expected to be too high. At present, the overall level of electrolytic nickel inventories at home and abroad is not high, and the domestic market has been affected by the shortage of inventories for a long time. If the supply of nickel in Russia is interrupted, the impact will be huge, and the domestic downstream may not be available.

In addition to the demand for stainless steel, nickel metal, as one of the important raw materials for ternary batteries, has continued to increase in price with the rapid development of the new energy industry in recent years.

"High nickel is the mainstream of the development of ternary batteries, and the proportion of nickel metal in the positive electrode material has gradually increased from 50% to more than 80%." A power battery researcher told the Securities Times reporter that high nickel is to reduce cobalt. The amount of metal used in order to compete with lithium iron phosphate in cost. However, soaring nickel prices will affect the pace of cost reduction for high-nickel batteries.

However, some investment institutions said in an interview that despite the rapid growth of power batteries, the demand for nickel in batteries only accounts for 10% of the total demand, which is not enough to drive nickel prices up. The recent rise in nickel prices has nothing to do with fundamentals, but is mainly a financial game at the futures level. "This situation will generally pass soon, and nickel prices will gradually return to the previous normal level, with little impact on industrial production."

Irrational commodities "for nickel"

The abnormally high international nickel price reflects the current situation of abnormal fluctuations in the overall commodity market. Since 2021, non-ferrous metals, including lead, zinc, copper, nickel, lithium, etc., have ushered in a sharp rise, and many varieties have hit new highs in several years. In addition, due to the recent short-term rise caused by geopolitical factors, downstream costs are under pressure. obvious.

In the interview, some industry insiders reported that the irrational rise of the entire commodity market has caused negative impacts on downstream processing enterprises. "Copper metal needs to be purchased in cable processing and production. The cost of materials previously signed with the downstream was only 69,000 yuan/ton, but now it has risen to 75,000 yuan/ton. In just a few days, hundreds of tons of goods have lost millions of dollars."

"The recent irrational rise in the commodity market as a whole is mainly due to supply concerns brought about by geopolitical risks, but there is absolutely no reason for the price increase of many commodities, it is just a speculation of funds." Cheng Xiaoyong, director of Baocheng Futures and Financial Research Institute He believes that it is reasonable for the price of precious metals such as gold to rise recently, and the hedging properties of precious metals can meet the hedging needs of funds. However, the prices of metals such as lead and zinc have also risen, which is not in line with the status quo of fundamentals.

He said that the abnormally high prices of many non-ferrous commodities have disrupted the operation of downstream industries, and the market will inevitably correct them in the future. After every crude oil surge, it is a process of economic recession, without exception. The impact of the surge in commodities on the downstream is devastating, and the market has begun to worry about the emergence of stagflation.

Xu Yang, chief economist of Zhongrui Fund in Hong Kong, believes that the logic of the recent abnormal price rise in the crude oil market is basically the same as that of the nickel market, because the United States and Europe are still importing Russian oil to ensure supply regardless of sanctions against Russia. The current growth rate and speed of these varieties are basically out of the fundamentals. It is expected that the geopolitical crisis will be resolved in the future, and the high point will fall rapidly. The current trend suggests investors to wait and see temporarily and do not operate.