[SMM Analysis] Nickel Salt Prices Show Weakness, Intermediate Product Coefficient Under Pressure in the Short Term

The MHP market was generally tight this week, with nickel and cobalt payables staying high. On the supply side, sulfur supply deficits led to continued production cuts at some producers, reducing MHP supply while producer quotes remained elevated. On the demand side, downstream nickel salt prices showed weakness, with loss risks still present, leaving nickel salt smelters relatively less willing to accept high-priced MHP, weighing on MHP payables. Given the soft downstream product prices, MHP payables are likely to be under pressure in the near term.

The high-grade nickel matte market also faced both weak supply and demand. High-grade nickel matte currently holds a clear cost advantage over MHP, but on the supply side, major suppliers completed long-term order signing, leaving limited spot availability; on the demand side, actual consumption capacity was insufficient due to downstream production line compatibility constraints. Overall purchasing sentiment was sluggish, trading activity was low, and payables remained stable.

The geopolitical risk premium in the international sulfur market was being gradually cleared, but supply-side disruptions persisted. The US and Iran signed a ceasefire memorandum of understanding on June 17, which took effect immediately. The agreement stipulates a phased unblocking of the Strait of Hormuz over 30 days, with the US beginning to lift its maritime blockade and Iran committed to completing mine clearance within 30 days. Ship traffic through the strait improved after the signing, but passage recovery remained a gradual process—some vessels were transiting while others were still awaiting clearance. With Turkey’s export ban extended to end-September and Russia’s sulfur export ban prolonged through end-June 2026, near-term supply disruptions continued. As the strait unblocking advances, sulfur prices are expected to gradually come under pressure in the medium and long term, though near-term supply recovery faces time lags, and prices are expected to swing wildly at highs. Further monitoring is needed on mine clearance progress, shipping recovery pace, and the direction of the final agreement within 60 days.

On nickel prices, expectations of further interest rate hikes continued to build this week, and combined with nickel ore quota news-driven disturbances, nickel prices fell sharply. Against a backdrop of steady MHP payables and stable high-grade nickel matte payables, the absolute prices of MHP and high-grade nickel matte edged down alongside the nickel price decline. Meanwhile, MHP cobalt prices and refined cobalt prices rebounded. Overall, the intermediate product market is expected to hold up well in the short term.