7.17 Morning Meeting Minutes
Market Hot Topics:
According to SMM, the impact of Typhoon Bavi on domestic high-grade NPI and stainless steel mill production was limited, with only factories in a few regions temporarily suspending production for 1-3 days, not impacting the overall supply-demand pattern. However, the typhoon caused varying degrees of delays in imported nickel pig iron shipments over the past half month. Now port shipping is gradually recovering, and after concentrated arrivals of NPI, the spot tightness is expected to ease to some extent in the second half of the month.
Macro:
(1) US June PPI fell 0.3% MoM, the first decline since last year, versus market expectations for flat; June PPI rose 5.5% YoY, significantly narrowing from 6.5% in May; June core PPI growth slowed to 4.7% YoY, and only rose 0.2% MoM, all below market expectations.
(2) China’s GDP grew 4.7% YoY in H1 2026, and Q2 GDP grew 4.3% YoY, up 0.9% QoQ.
Spot Market:
On July 16, SMM #1 refined nickel price rose 550 yuan/mt from the previous trading day. Regarding spot premiums, Jinchuan #1 refined nickel averaged 2,000 yuan/mt, unchanged from the previous trading day, while the range for domestic mainstream brand electrodeposited nickel was -300 to 500 yuan/mt.
Futures Market:
On the morning of July 16, the most-traded SHFE nickel contract surged, breaking through 130,000 yuan/mt and once rising to 133,000 yuan/mt, with morning gains reaching 2.9%; LME nickel also held above $17,000/mt, up about 2.5% in the morning.
Recently, macro, policy, and cost-side bullish factors have re-emerged, coupled with a MACD golden cross, nickel prices holding above the 10-day moving average, and bearish fund profit-taking, giving nickel prices rebound momentum. However, weak demand and high inventory continue to cap upside room. The most-traded SHFE nickel contract is expected to trade in a range of 127,000–137,000 yuan/mt. Going forward, attention should be paid to the results of Indonesia’s July RKAB quota approval and the Strait of Hormuz situation.
Nickel Sulphate
On July 16, the average price of SMM battery-grade nickel sulphate remained stable.
Cost side, expectations of sulphur price increases combined with technical repair drove nickel prices sharply higher today, with immediate production costs of nickel sulphate rebounding. Supply side, the tight supply pattern of intermediate products remains unchanged, with MHP payables and auxiliary materials like sulphuric acid prices still at high levels. Some salt plants have expectations for production cuts, but some recycling enterprises are releasing inventory. Demand side, due to the significant decline in nickel prices MoM and some downstream enterprises accumulating inventory, downstream restocking sentiment is weak, and acceptance of nickel salt prices is relatively low. Today, the Willingness to Sell Sentiment Factor for upstream nickel salt smelters was 1.8, the Purchasing Sentiment Factor for downstream precursor plants was 2.5, and the Sentiment Factor for integrated enterprises was 2.4 (historical data can be accessed via the database).
Looking ahead, the stockpiling period in July is expected to be postponed to late July. Attention needs to be paid to the impact of nickel prices and intermediate products on cost support strength.
NPI
July 16 news: The SMM high-grade NPI market sentiment factor was 1.96, flat MoM; the upstream sentiment factor for high-grade NPI was 2.06, flat MoM; and the downstream sentiment factor for high-grade NPI was 1.86, flat MoM. Today, the supply-demand spread contradiction for high-grade NPI spot narrowed slightly. Forward cargoes were pre-sold and locked in, but short-term port spot arrivals increased, easing the spot tightness to some extent. The transaction center continued to shift downward. On the supply side, divergence was evident. Forward long-term contract cargoes were scheduled in advance to August–September. Suppliers' forward shipment quotes remained firm, but with recent spot arrivals, market inquiries at low prices increased. In the short term, high-grade NPI is still expected to have some downside room.
Stainless steel
According to SMM on July 16, SS futures showed an overall pattern of strengthening and probing upward. Driven by stronger SHFE nickel, SS rose and probed upward in tandem. As of the close, the most-traded SS contract settled at 14,795 yuan/mt. In the spot market, although SS futures trended steady in the morning and spot quotes remained stable in tandem, they followed SHFE nickel’s rapid surge in the afternoon, with spot quotes also rising in response. Despite the rapid price swings, downstream end-user purchases remained cautious, but low-priced cargoes in the market had mostly disappeared.
SS most-traded contract. At 10:15 a.m., SS2608 was at 14,665 yuan/mt, up 5 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 255-605 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was flat; for cold-rolled uncut edge 304/2B coil, the average price in Wuxi was flat and that in Foshan held steady; the price of cold-rolled 316L/2B coil in Wuxi was flat; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; and cold-rolled 430/2B coil in both Wuxi and Foshan was flat.
This week, macro liquidity fluctuations intensified, and stainless steel futures charted an independent weak trend, with the futures movement significantly decoupling from the pace of SHFE nickel and other base metals. During the week, sentiment-driven fund flows alternated, causing SS futures to swing wildly. The key support level of 14,500 yuan/mt was breached earlier, with the overall trend center continuing to shift downward, and overall market trading sentiment leaning bearish. In terms of spot and inventory, the breakdown and weakness in futures continued to drag on the spot market performance, with concentrated bearish fundamentals from the off-season being released. The market has now entered the traditional consumption off-season, with end-user just-in-time demand being inherently weak. This was compounded by the continuous decline in futures, which further dampened market confidence. Downstream end-users were dominated by a wait-and-see sentiment, and purchase willingness remained sluggish. This week, mainstream steel mills abandoned their earlier strategy of holding prices firm, proactively lowering spot guidance prices and pulling down market spot quotations in tandem. Trading activity was characterized by an impulsive release followed by rapid cooling, with sustained just-in-time demand severely lacking. Overall trading returned to a sluggish pattern. Amid weak end-user purchasing and blocked destocking, the pace of inventory buildup accelerated markedly. Social inventory continued to mount, and spot fundamental pressures became further accentuated. Cost and profit side, finished steel and raw material prices declined in tandem this week. Steel mill smelting profits narrowed slightly but remained in positive territory. Affected by falling spot prices and squeezed product margins, mainstream steel mills lowered their raw material procurement expectations, releasing NPI purchase tender prices at low levels. This drove high-grade NPI market prices lower, while stainless steel scrap purchase prices also pulled back in sync, causing the overall raw material cost center to move downward. Steel mill profits were slightly compressed WoW, but the industry as a whole did not slip into losses, and production profit resilience persisted. Overall, this week's stainless steel market showed a weak pattern of futures breaking key support and declining, spot prices following the decline and easing, inventory buildup accelerating, and profits slightly contracting. Macro capital disturbances led the independent weakness in futures. Off-season weak just-in-time demand, the withdrawal of steel mills' price-holding stance, and inventory accumulation were the core bearish factors for spot. In the short term, the weak market structure is hard to reverse. Futures will continue to consolidate on a subdued note, and spot prices will remain under pressure.
Nickel Ore:
Philippine Market:
This week, the Philippine nickel ore market remained generally stable. CIF China quotes were essentially flat WoW, with Ni 1.3% reported at around $46.25/wmt, Ni 1.4% at around $56.5/wmt, and Ni 1.5% at around $64.5/wmt. Overall trading remained sluggish. Currently, the price spread between Ni 1.3% and Ni 1.4% ore stays at about $10/wmt. According to SMM's market communication, due to the low grade of Ni 1.3% ore, only a limited number of downstream smelters can meet production requirements, so actual transactions continued to be scarce. In contrast, Ni 1.4% ore is suitable for more Chinese NPI and some Indonesian RKEF smelters, with relatively stable procurement demand, thus its price performance remained firm.
Supply side, weather conditions in the main Philippine mining areas were generally stable, with normal production and port shipments. Only localized areas experienced short showers, which had limited impact on mining and loading. Overall supply remained steady. Demand side, Chinese and Indonesian buyers continued to maintain a strategy of purchasing as needed. Indonesian smelters' inventories stayed high, and their restocking willingness was insufficient, with market transactions mainly driven by just-in-time procurement.
On the inventory front, nickel ore stocks from the Philippines at Chinese ports continued to accumulate. As of July 10, total nickel ore inventories at ports nationwide increased to 6.84 million wmt (approximately 53,700 mt in nickel metal content), up 160,000 wmt from the previous week;
amid persistent inventory buildup at ports, ample Indonesian supply, and subdued LME nickel prices, Philippine nickel ore prices are expected to consolidate on a subdued note in the short term, with the subsequent price trend still largely depending 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. Indonesia's Ministry of Energy and Mineral Resources released the HMA nickel reference price for the second period of July at $16,533.67/dmt, a significant drop from the first July period ($17,593.33/dmt). The theoretical HPM prices fell accordingly: for 1.4% grade saprolite ore, the HPM is estimated at around $53.6/wmt; for 1.5% grade saprolite ore, around $58.23/wmt. The spot market was steady this week, with the CIF average price for 1.4% ore holding at $55.1/wmt, a premium of about $1.3/wmt to HPM; 1.5% ore CIF average price held at $61.5/wmt, a premium of about $3/wmt, both basically flat from the prior week.
For limonite ore, the CIF average price for 1.2% ore remained at $29.5/wmt, and 1.3% ore at $31.5/wmt. Looking ahead, Indonesian nickel ore prices face downside room.
Despite the stagnation in prices, market fundamentals stay loose, with current smelter inventories sufficient for over two months, and a supply-demand gap limiting near-term restocking demand. Miners widely expect CIF transaction prices at a $3–5 premium to HPM, further encouraging cautious buying. At the same time, smelters have been raising grade requirements for ore procurement, focusing their buying on nickel grades of 1.45%–1.50%, which further suppressed demand for lower-grade ores. Small-scale miners showed limited acceptance of current prices, with actual transactions concentrated among large miners. Looking ahead, the market consensus is that nickel ore prices will face some downward pressure over the next 1–2 months, driven mainly by high smelter inventories and ample supply. However, if the total volume of RKAB approvals by end-Q3 falls below 300 million mt, or if the approval process continues to slow down, coupled with potential supply disruptions from the rainy season in Sulawesi in Q4, ore prices could still find some support.
![[SMM Nickel Midday Review] On July 17, nickel prices plunged, and June broad money (M2) was up 8% YoY.](https://imgqn.smm.cn/usercenter/vcoVV20251217171732.jpeg)
