[SMM Analysis] The Pattern of Weak Supply and Demand for Nickel Intermediate Products Continued, with the Coefficient Remaining Stable and Absolute Prices Rising Driven by Higher Nickel Prices

Affected by continued weakness on both the supply and demand sides, the MHP market remained sluggish overall this week, with MHP payables holding steady and few transactions concluded. Supply side, disrupted by multiple factors including low operating rates at some project lines in an Indonesian industrial park and the risk of sulphur supply disruptions, MHP supply contracted significantly, with March production schedules declining MoM and mainstream suppliers shipping cautiously. Demand side, downstream nickel salt prices dropped slightly, and nickel salt smelters showed low acceptance of high-priced MHP, while the psychological price spread between buyers and sellers continued to widen, making spot order transactions difficult. Against this backdrop, MHP nickel payables and cobalt payables remained broadly stable, and the market stayed in a stalemate marked by “offers with no trades.”

The high-grade nickel matte market likewise showed a pattern of weak supply and demand and sluggish trading, with the payable indicator holding steady. In terms of economics, as MHP payables rose, the economic advantage of high-grade nickel matte over MHP became more apparent. However, in terms of actual circulation, supply remained relatively stable, mainstream suppliers had completed long-term contract order signing, and available spot cargo in the market was limited, while on the demand side, constrained by downstream production line compatibility, consumption capacity for high-grade nickel matte was insufficient. Overall, both market inquiries and purchase sentiment were weak, and the high-grade nickel matte payable indicator remained at a stable level.

Sulphur market, premiums driven by geopolitical risks continued to rise, pushing sulphur prices higher. Navigation through the Strait of Hormuz had yet to resume, geopolitical tensions continued to escalate, and coupled with repeated shifts in the negotiating stance of both the US and Iran, market sentiment remained highly uncertain. Geopolitical risk premiums kept rising, pushing sulphur prices higher. Constrained by limited sulphur supply, smelters continued to draw down sulphur inventory, but terminal prices capped raw material procurement, and downstream enterprises generally showed low acceptance of high-priced sulphur. Close attention should be paid to developments in geopolitical events and the recovery of transport routes going forward.

Nickel prices, supported by the combined effects of policy expectations that Indonesia may impose a nickel export tax, firm ore prices on the raw material side, and easing macro sentiment, rose WoW this week. Against the backdrop of stable payables, MHP and high-grade nickel matte prices moved higher in tandem with nickel prices. In addition, higher refined cobalt prices also boosted the cobalt price in MHP.