[SMM Analysis] Supply Contraction + Demand Recovery Push Up MHP and High-Grade Nickel Matte Payables

Published: May 8, 2026 14:21

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The MHP market was generally tight this week, with nickel and cobalt coefficients rising. Supply side, Indonesia adjusted the HPM formula, creating expectations of certain cost increases for HPAL ore, and combined with a sulphur supply deficit causing some producers to plan to cut production this month, MHP supply declined and transaction coefficients moved higher. Demand side, downstream nickel salt prices rose somewhat this week, but the risk of losses persisted. Nickel salt smelters showed relatively low acceptance of high-priced MHP, but as downstream ternary demand recovered to some extent, some producers had rigid purchasing needs, supporting the strengthening of MHP nickel coefficients. Under the influence of tight supply-demand expectations, the market is expected to hold up well in the short term.

The high-grade nickel matte market was also in a pattern of weak supply and demand. Currently, high-grade nickel matte has a clear economic advantage over MHP, but on the supply side, mainstream suppliers have completed long-term contract order signing, with limited available spot cargo. On the demand side, actual consumption capacity was insufficient due to downstream production line compatibility constraints. Overall purchasing sentiment was weak, trading activity was low, and coefficients stayed stable.

Sulphur market, the international sulphur market supply continued to tighten, pushing prices further higher. Middle East geopolitical tensions showed no signs of easing, with no clear timetable for the resumption of navigation through the Strait of Hormuz, compounded by Turkey's export ban and Russia's ban extension, keeping the supply side continuously tight. Given that the magnitude of supply contraction far exceeded demand contraction, the strong price pattern was difficult to reverse. Sulphur prices are expected to stay high and further push up downstream sulphuric acid and new energy material costs. Continued attention is needed on geopolitical developments and the recovery of transportation channels.

Nickel prices, US-Iran tensions showed signs of easing this week, and nickel prices pulled back sharply. Against the backdrop of rising MHP payables and stable high-grade nickel matte coefficients, the absolute prices of MHP and high-grade nickel matte declined along with the pullback in nickel prices. In addition, MHP cobalt prices also rose, driven by the rebound in refined cobalt prices. Overall, the intermediate product market is expected to hold up well in the short term.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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