Affected by the surge in LME nickel, the main domestic Shanghai nickel futures contract continued to trade at the daily limit on March 8, closing at 267,700 yuan/ton, an increase of 17%.

　　On March 8, after the LME nickel staged an epic short squeeze, the LME announced that it would suspend nickel trading until at least this Friday, and cancel all transactions at 00:00 on March 8, 2022, UK time (the morning on March 8, Beijing time). 8:00) or after nickel trades executed on OTC and LME select screen trading systems.

　　The consensus in the market is that the current nickel price has deviated from the fundamentals.

From the domestic market, can nickel prices remain high?

What risks will the market face?

Nickel prices will remain strong

　　On the night of March 8, the main domestic Shanghai nickel futures contract continued to trade at the daily limit, closing at 267,700 yuan/ton, an increase of 17%.

　　According to the "Measures for Risk Control and Management of Shanghai Futures Exchange", after the daily limit for two trading days, the price limit of Shanghai Nickel increased to 17%.

If there is another daily limit, the exchange will decide whether to suspend trading on the fourth trading day.

　　"Recently, the London nickel and Shanghai nickel markets are in a state of rising positions, coupled with strong fundamental support factors, nickel prices will remain strong in the short term." Wang Yanqing, an analyst at CITIC Construction Investment Futures, told The Paper.

　　Industrial Futures said that the low global nickel inventory combined with the expectation of high demand in the future is the core support for the rise in nickel prices.

At present, the overall domestic nickel inventory is at a historically low level.

　　Fangzheng mid-term futures non-ferrous precious metals analyst Wang Jun told the surging news reporter that the world's current nickel inventory is low, and the nickel price in my country's market has also risen strongly driven by the external market, breaking the 220,000 yuan / ton mark, leading the domestic non-ferrous metal spot market to rise.

Under the combined effect of the continuous fermentation of external events and the tight supply of inventory, the global nickel price is expected to continue to be strong, and it will be very important for the LME to adjust the rules and market.

　　CITIC Futures pointed out that from the perspective of nickel's own fundamentals, the fundamental strong foundation will not change in the short term.

Against the background of soaring demand for batteries and increased production of stainless steel, inventories at home and abroad have continued to drop to a low level. Overseas inventories have dropped by nearly 60% to 77,000 tons from a high point. Shanghai nickel inventory is only 13,000 tons, and nickel resources in the market are tight. , the domestic spot premium rose sharply, and the London Cash-3M premium and discount once reached a very high level of 690 US dollars / ton, and the squeeze was fierce.

　　It is worth noting that the price difference between Shanghai nickel and LME nickel has continued to expand since the end of February, and it was nearly 40,000 yuan / ton on March 7.

　　CITIC Futures believes that Russia’s nickel exports have turned to the country, which will lead to an increase in domestic nickel supply, which has made the price gap between internal and external prices continue to exist, and domestic import losses have widened rapidly.

　　Wang Yanqing also said that the reason for this situation is that China has the opportunity to obtain Russian nickel supply, and the domestic supply is expected to be more abundant than that of foreign countries.

　　"If Russian nickel enters the country and settles at the price of RMB, and Russian nickel cannot be exported to other countries again, then naturally there will be a price depression in domestic nickel prices, and there is no room for convergence of internal and external price differences. If Russian nickel is still settled at LME prices, then the current The import window cannot be opened." He further analyzed that in theory, the foreign gap can be filled by exporting domestic pure nickel abroad, thereby reducing the price difference between domestic and foreign, but in fact, the nickel that my country can export is very limited, making up for the drop in foreign supply. Over the years my country is a net importer of nickel.

　　Xia Yingying, a metal analyst at Nanhua Futures, believes that the nickel price difference at home and abroad will first return in the future, and then the two will run simultaneously to a reasonable range. The part that rose sharply on March 8 may be quickly withdrawn in the next few trading days. , but the entire price pullback could last for weeks.

Greater risk accumulation in the market outlook

　　On the evening of March 8, the Shanghai Futures Exchange issued an announcement stating that the recent international situation is complex and volatile, and the price of nickel in the overseas futures market has fluctuated violently.

"Our firm will take further measures according to market conditions and regulations. Member units and investors are requested to do a good job in risk prevention, invest rationally, and jointly maintain the smooth operation of the market."

　　This is the fourth round of risk warning notices issued by the exchange recently.

　　On the evening of the 8th, the Shanghai Futures Exchange also announced that starting from the trading on March 10 (that is, the night market on March 9): nickel futures NI2204, NI2205, NI2206, NI2207, NI2208, and NI2209 contracts will be closed within days. 60 yuan / lot.

　　Wuxi Stainless Steel Electronic Trading Center Co., Ltd. also issued a notice on the suspension of nickel trading, saying that from March 8, the transaction of all B/L purchase and sale agreements for nickel varieties will be suspended, and the recovery time will be notified separately; The deposit for all B/L purchase and sale agreements of various varieties is up to 20%. Before that, all dealers holding B/L purchase and sale agreements for nickel varieties are restricted from withdrawing gold.

　　For the risk factors facing nickel in the future, Wang Yanqing believes that there are three main aspects.

　　First, the situation in Ukraine is likely to be de-escalated.

The second is the opening of the Russian nickel export channel.

At present, Europe and the United States have not directly targeted Russian nickel sanctions. The main reason is that the fear of market spread has made all parties reluctant to trade with Russian nickel to avoid potential risks.

If the Russian nickel export channel is opened up, including the smooth domestic import of Russian nickel, then the supply worries will no longer be concerned, which will suppress the nickel price.

Third, demand has weakened significantly.

At present, some downstream companies have begun to suspend orders, waiting for the price to be clear. If the downstream continues to stagnate and demand weakens sharply, it will also bring the risk of a correction to the nickel price.

　　"Compared with LME nickel, the price of Shanghai nickel is low, but it is already at a high level." Wang Yanqing said that due to the setting of the domestic futures market's rising and falling board system, margin system, and position system, the possibility of short positions is less likely.

　　Xia Yingying also reminded the risk that in the face of extreme market conditions, the first thing for investors to do is to control risks, reduce positions as much as possible, or even wait and see with short positions.

Because in the case of extremely high volatility, the exchange will increase the margin, and the price of commodities can easily rise and fall sharply, and customers will face the risk of liquidation.

At the same time, the extreme market is neither a trend market nor a volatile market, and it is more difficult to operate, and it is easy to cause huge floating losses.

Therefore, controlling risk is especially important at this moment.

　　"At present, nickel prices are mostly affected by capital and news factors, and the risk of market fluctuations is high." Looking ahead, CITIC Futures believes that from the perspective of the domestic market, due to the extreme negative price difference between Shanghai nickel and LME nickel, the surge in LME nickel has driven Shanghai nickel to rise. Nickel keeps rising passively, and once LME nickel turns to turn down, this will undoubtedly increase the risk of bilateral volatility of Shanghai nickel. Investors need to pay attention to the differences between domestic and foreign markets and participate in market transactions cautiously.

　　"We recommend that companies participate in derivatives transactions to pay attention to a few points: 1. The hedging scale should match the company's own production capacity, and it should not be easily over-hedged; 2. The hedging contract should match the production cycle. It is not enough to over-hedge future output. 3. It is necessary to identify whether the hedging target has the nature of standard products, and pay attention to the change in the price difference between standard products and non-standard products.” Li Yaoyao, a researcher at Xinhu Futures Nonferrous Metals, pointed out.