Jul 14 Morning Meeting Notes
Market Hotspots:
LS-L&F Battery Solution (LLBS) announced that it will commence commercial production at its Saemangeum precursor plant in South Korea in Q4 2026. The company, 55% owned by LS Group and 45% by L&F, has completed construction of production facilities with an annual capacity of 40,000 mt of Ni-Co-Mn (NCM) ternary cathode precursor. Precursor is an intermediate product for cathode materials made from metal raw materials such as nickel, cobalt, and manganese, accounting for roughly 70% of cathode material manufacturing costs, and it significantly impacts power battery performance and cost. Meanwhile, LS Group’s subsidiary LS MnM also plans to complete construction of its battery materials plant in Onsan, South Korea, and commence operations this year, primarily producing metal sulphates such as nickel sulphate, a key raw material for ternary cathode precursors.
Macro:
(1) On the 12th local time, US President Trump stated that the US carried out a "fierce strike" on Iran the previous night. Regarding the navigability of the Strait of Hormuz, statements from various parties were conflicting. The Iranian Persian Gulf Maritime Authority announced on social media on the 12th that the Strait of Hormuz is currently impassable. Trump, however, stated that "as far as the US is concerned, the Strait of Hormuz remains open."
(2) Premier Li Qiang presided over a State Council executive meeting to hear reports on the progress of Digital China construction and to study work related to cultivating emerging pillar industries.
Spot Market:
On July 13, the SMM #1 refined nickel price fell by 250 yuan/mt from the previous trading day. Regarding spot premiums, the average for Jinchuan #1 refined nickel was 2,150 yuan/mt, down 100 yuan/mt from the prior trading day, while the range for mainstream domestic brands of electrodeposited nickel was -300 to 500 yuan/mt.
Futures Market:
The most-traded SHFE nickel contract (2609) edged down in early trading, closing the morning session at 128,030 yuan/mt, up 0.02%.
Over the weekend, the US-Iran conflict saw renewed disruption, with the concurrent rise of the US dollar and crude oil weighing on metals. However, Indonesia's Ministry of Energy and Mineral Resources officially announced on July 10 that it will no longer broadly raise national nickel ore mining production quotas; the scale of quota increases will be very limited, with strict exception approval channels established only for local smelters facing severe raw material supply shortages. In the short term, nickel prices may rebound, with the most-traded SHFE nickel contract expected to trade in the range of 127,000-133,000 yuan/mt.
Nickel Sulphate
On July 13, SMM assessed battery-grade nickel sulphate average prices as stable.
Cost side, renewed uncertainty in the Strait of Hormuz pressured the broader non-ferrous metals complex, and spot production costs for nickel sulphate consolidated at lows; supply side, the tight supply situation for intermediate products persisted, MHP payables and prices for auxiliary materials like sulphuric acid remained elevated, some salt plants held expectations for production cuts, but certain enterprises released low-cost inventory; demand side, due to a sharp MoM decline in nickel prices, coupled with some inventory accumulation at downstream enterprises, downstream restocking sentiment was weak, and their acceptance of nickel salt prices remained relatively low. Today, the upstream nickel salt smelter's Willingness to Sell Sentiment Factor was 1.8, the downstream precursor plant's procurement sentiment factor was 2.5, and the integrated enterprise sentiment factor was 2.4 (historical data is accessible via the database).
Looking ahead, July's stockpiling period is expected to shift to the latter half of the month, and attention should be paid to the impact of nickel prices and intermediate products on cost-side support.
NPI
On July 13, SMM reported that the high-grade NPI market sentiment factor was 2.00, down 0.03 WoW. The upstream high-grade NPI sentiment factor was 2.17, down 0.07 WoW, and the downstream high-grade NPI sentiment factor was 1.83, flat WoW. Today, divergent long and short expectations persisted in the high-grade NPI spot market. The overall circulating spot supply was relatively tight, hindering transactions on both the upstream selling and downstream purchasing sides, with overall concluded on-the-spot deals being limited. Supply side, merchant quotations showed distinct divergence, with some mainstream cargo holders firmly quoting high prices, and upstream entities generally maintained a strong inclination to hold prices firm. Procurement side, some end-users lowered their target purchase prices in reference to steel scrap price declines, while other buyers grew concerned about near-term market volatility and slowed their procurement pace. Overall, persistently weakening stainless steel finished products capped the upside room for NPI prices from the end-use side, while lower steel scrap prices further amplified the cost advantage of this alternative furnace charge, continuously diverting NPI procurement demand. However, the short-term tightness in spot circulation, coupled with firm upstream supplier quotations, supported rising spot premiums, and the psychological price spread between upstream and downstream players continued to widen, fostering a pronounced market tug-of-war atmosphere.
Stainless Steel
According to SMM on July 13, SS futures moved sideways within a narrow range. Non-ferrous metals futures broadly maintained a consolidating trend on a subdued note, with SS extending its prior weak performance with limited overall amplitude. As of the midday close, the most-traded SS futures contract settled at 14,315 yuan/mt. Spot market side, weighed down by the low-level fluctuations in SS futures and the traditional off-season, end-use demand remained persistently weak. Stainless steel mills continued to hold their guidance prices flat, and trader quotations mostly remained steady for the time being, though market sentiment leaned bearish and subdued.
The most-traded SS futures contract. At 10:15 AM, SS2608 was reported at 14,330 yuan/mt, down 15 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area were in the 540-940 yuan/mt range. In the spot market, the average price of Wuxi cold-rolled 201/2B coil fell by 50; for cold-rolled uncut edge 304/2B coil, the average price in Wuxi remained steady, and the average price in Foshan remained steady; the price of Wuxi cold-rolled 316L/2B coil rose by 100 yuan/mt; for hot-rolled 316L/NO.1 coil, quotations in Wuxi were flat; cold-rolled 430/2B coil prices in both Wuxi and Foshan were flat.
This week, macro capital flow disturbances intensified, and stainless steel futures charted an independent weak trend, with its price movement significantly decoupling from the operational rhythm of SHFE nickel and other non-ferrous metals. During the week, shifting capital sentiment led to wild swings in stainless steel futures. The key support level of 14,500 yuan/mt was breached earlier, pushing the overall price center steadily lower and tilting broader market trading sentiment toward bearishness. In the spot and inventory landscape, the breakdown and weakness in futures continued to drag on spot market performance, while off-season fundamentals triggered a concentrated release of bearish factors. With the market now entering the traditional consumption off-season, inherently weak end-user rigid demand, combined with the persistent downward pressure from futures further undermining market confidence, a wait-and-see sentiment dominated downstream terminals, and purchase willingness remained sluggish. This week, mainstream steel mills abandoned their earlier strategy of holding prices firm, proactively cutting spot guidance prices and pulling spot market quotes lower in tandem. Transaction volumes showed a pattern of brief, pulse-like release followed by rapid cooling, with a serious lack of sustained rigid demand, and overall trading activity returned to a sluggish state. Against the backdrop of weak end-user purchases and hindered destocking of goods, the pace of inventory buildup in the market noticeably quickened, social inventory continued to accumulate, and spot fundamental pressures intensified further. On the cost and profit front, finished product and raw material prices fell in tandem this week, while steel mill smelting profits narrowed slightly but remained positive. Weighed down by falling spot prices and pressure on product profitability, mainstream steel mills lowered their raw material purchase expectations, releasing NPI procurement tenders at low prices. This pulled high-grade NPI market prices lower in response, while stainless steel scrap purchase prices also pulled back concurrently, shifting the overall raw material cost center lower. Steel mill profits shrank MoM, but the industry as a whole did not slip into losses, as production profitability retained a degree of resilience. Overall, the stainless steel market this week exhibited a subdued pattern: futures broke down and trended lower, spot prices followed suit and eased, inventory built up at an accelerated pace, and profits contracted slightly. Macro-driven capital flows steered the independent weakness in futures, while off-season rigid demand sluggishness, steel mills' retreat from holding prices firm, and swelling inventories were the core bearish drivers for the spot market. The near-term market weakness will be difficult to reverse, with futures consolidating on a subdued note and spot prices remaining under persistent pressure.
Nickel Ore:
Philippine Market:
The Philippine nickel ore market remained broadly steady this week, with CIF China quotes essentially flat WoW. Ni 1.3% was reported at approximately $46.25/wmt, Ni 1.4% at about $56.5/wmt, and Ni 1.5% at around $64.5/wmt, with overall transactions remaining sluggish. The price spread between Ni 1.3% and Ni 1.4% ore held at around $10/wmt. Based on SMM's market communication, the lower grade of Ni 1.3% ore limited the number of downstream smelters that could process it to meet production requirements, with actual transactions persistently scarce. In contrast, Ni 1.4% ore is suitable for more Chinese NPI and some Indonesian RKEF smelters, with relatively stable procurement demand, and therefore, its price performance held relatively firm.
Supply side, weather conditions in major Philippine mining areas were generally stable, with normal production and port shipments maintained. Only localized brief showers occurred, having limited impact on mining and loading, and overall supply remained steady. Demand side, buyers in China and Indonesia continued to purchase as needed, while Indonesian smelters' inventories stayed high and restocking willingness was insufficient. Market transactions were mainly just-in-time procurement.
Inventory side, Philippine nickel ore inventories at Chinese ports continued to accumulate. As of July 10, total nickel ore inventories at national ports rose to 6.84 million wmt (approximately 53,700 mt in metal content), an increase of 160,000 wmt from the previous week.
Against the backdrop of continuously accumulating port inventories, ample Indonesian supply, and weak LME nickel prices, Philippine nickel ore prices are expected to consolidate on a subdued note in the short term. Future price trends will still mainly depend on the progress of Indonesia's RKAB approvals and changes in Indonesian ore supply.
Indonesian market:
The Indonesian nickel ore market remained in an overall loose supply pattern. In the first half of July, the HMA was maintained at $17,225.67/dmt, corresponding to an HPM of approximately $56.6/wmt for 1.4% saprolite ore and approximately $61.5/wmt for 1.5% saprolite ore. This week in the spot market, performance was stable. The average CIF price for 1.4% ore was maintained at $57.8/wmt, a premium of about $1.3/wmt over HPM; the average CIF price for 1.5% ore was maintained at $64.5/wmt, a premium of about $3/wmt, both basically flat compared to the previous week.
For limonite ore, the average CIF price for 1.2% ore was maintained at $29.5/wmt, and for 1.3% ore at $31.5/wmt, a decrease of $0.5/wmt from the previous week. SMM expects the HMA for the second half of July to decline, falling to $16,533.66. Going forward, Indonesian nickel ore prices face downside room.
Despite stagnating prices, market fundamentals remained loose. Current smelter inventories could support more than two months of production, and a supply-demand gap led to limited short-term restocking demand. Miners generally expect CIF transaction prices to be at a premium of $3 to $5 over HPM, further causing buyers to remain cautious. Meanwhile, smelters have been raising their requirements for ore grades, with procurement focus centered on ore with nickel grades of 1.45%–1.50%, further suppressing demand for low-grade ore. Small miners have limited acceptance of current prices, and actual transactions remain concentrated among large miners. Looking ahead, the general market consensus is that nickel ore prices will still face some downward pressure over the next one to two months, mainly driven by high smelter inventories and ample supply. However, if the total approved volume of supplementary RKAB falls below 300 million mt at the end of Q3, or the approval process continues to slow down, coupled with potential supply disruptions caused by the rainy season in Sulawesi in Q4, ore prices may still receive some support.
![[SMM Nickel Intermediate Products Daily Review] July 14 MHP, high-grade nickel matte nickel prices rise](https://imgqn.smm.cn/usercenter/yUOUz20251217171732.jpg)
