An oversupply of Norilsk materials and shortage of Jinchuan materials expanded the price spread between Jinchuan and Norilsk nickel to its largest in close to three years on Wednesday September 5, our research found.
Relative to the Wuxi Stainless Steel Exchange September contract, premiums of Norilsk nickel were heard at 100 yuan/mt in the Shanghai market while premiums of Jinchuan resources were heard at 5,700 yuan/mt. The producer of Jinchuan materials offered at 108,300 yuan/mt.
Supplies exceeded demand as large amounts of Norilsk materials entered the domestic market. Meanwhile, limited supplies and weaker prices of futures buoyed premiums of Jinchuan materials.
Shanghai saw quiet trades on Tuesday and Wednesday after downstream consumers made purchases on Monday. Most transactions were heard at 102,350-108,250 yuan/mt on Wednesday.