[SMM Analysis] Review of the Nickel Intermediate Product Market During the 2026 Chinese New Year Holiday and Post-Holiday Outlook

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I. Price Review

The nickel intermediate product market experienced a holiday-induced standstill, with coefficients remaining flat. For MHP, there were few market transactions. On the supply side, upstream smelters had sold out their Q1 supply, and Q2 offers were not yet available. Although traders provided sporadic offers, few deals were finalized against the backdrop of unclear direction from both upstream and downstream participants. On the demand side, some downstream nickel salt smelters halted operations during the holiday, while other normally operating producers consumed their raw material inventories, resulting in minimal procurement activity by enterprises. Under the overall tight supply-demand balance, the MHP nickel payables and cobalt payables held firm at high levels this week. For high-grade nickel matte, the market maintained a tight supply-demand balance, with coefficients remaining unchanged.

Regarding nickel prices during the Chinese New Year holiday, prices surged before the holiday as Indonesia significantly cut its 2026 nickel ore RKAB quota to approximately 250-260 million mt, fueling strong bullish sentiment in the market. After pulling back during the holiday, prices rebounded. On February 17, LME nickel closed at $16,830/mt, down 1.81% from the previous trading day. From February 18 to 20, influenced by a tailings landslide accident at the Indonesian IMIP park, LME nickel prices saw a noticeable rebound, but overall, they continued to fluctuate below $18,000/mt. In summary, nickel prices rose MoM during the Chinese New Year holiday.

Combining coefficients, during the 2026 Chinese New Year holiday (February 15 to February 23), prices for MHP and high-grade nickel matte increased, and the cobalt price for MHP also rose.

II. Industry Developments

On January 18, 2026, a tailings dam at a nickel intermediate product project in an Indonesian park experienced a landslide accident. The affected area is currently suspended from operations.

III. Post-Holiday Outlook

For nickel intermediate product coefficients, in the MHP market, due to expectations of strong nickel price performance combined with low downstream acceptance of high prices, the nickel payables are expected to have slight downside room after the holiday, while cobalt payables are anticipated to hold firm at high levels. In the high-grade nickel matte market, strong cost support and sellers' firm intention to hold prices high suggest that nickel payables will likely remain at elevated levels. For nickel prices, expectations of tightening supply remain the core driver, and prices are expected to enter a phase of wide swings at high levels after the Chinese New Year holiday, which will drive nickel intermediate product prices.

Cost side, for key auxiliary material sulfur, the market was under pressure in the short term due to holiday sentiment disturbances. However, with the continuous release of Indonesian smelting capacity and sulfur's role as a core raw material for acid production, regional long-term demand support remains solid. Prices are expected to move sideways within a high range, with upside room in the long term. Nickel ore prices, nickel ore prices are expected to rise, influenced by the quota tightening news, the impact of the tailings landslide accident at the Indonesian IMIP park, and expectations of raw material stocking for new MHP project commissioning. From an overall perspective, the costs of MHP and high-grade nickel matte are expected to continue rising.