Weak downstream demand weighs on intermediate product payables
The tight supply-demand balance in the MHP market eased slightly this week, with nickel and cobalt payables edging lower. On the supply side, some producers recovered output after shipping lanes reopened, though production remained below previous levels, while several traders also released inventory to some extent, increasing market availability. On the demand side, mid-year nickel salt and cobalt salt prices showed weakness, and with significant losses pressuring the cost side, salt plants showed relatively low acceptance of high-priced MHP, putting pressure on MHP payables. Amid rising supply and weak demand, MHP payables may pull back in the near term.
The high-grade nickel matte market also faced a weak supply-demand situation. High-grade nickel matte currently holds a clear cost advantage over MHP, but on the supply side, mainstream suppliers have already completed long-term order signing, leaving limited spot cargo available. On the demand side, actual consumption capacity was insufficient due to downstream production line compatibility constraints. Overall purchasing sentiment remained weak, trading activity was low, and the high-grade nickel matte payable indicator held steady.
Geopolitical premiums in the international sulfur market saw repeated tug-of-war. In mid-June, a US-Iran ceasefire briefly restored shipping, but the truce collapsed on July 7, blocking the Strait of Hormuz once again and tightening Mideast supply. Additionally, Kazakhstan's indefinite ban on sulfur exports to non-Russian destinations, Russia's extended ban through the end of 2026, and Turkey's ban lasting through Q3 further escalated short-term supply disruptions, keeping sulfur prices swinging wildly at highs.
As for nickel prices, they briefly rebounded from oversold levels this week but eventually pulled back, constrained by fundamentals. Against the backdrop of declining MHP payables and a stable high-grade nickel matte payable indicator, prices for both MHP and high-grade nickel matte improved slightly as nickel prices rebounded. In addition, MHP cobalt prices and refined cobalt prices remained generally stable. Overall, the intermediate product market will be under pressure in the near term.
