July 21 Morning Meeting Minutes
Market Hot Topics:
In June 2026, China's refined nickel imports were 25,691 mt, down 15% MoM but up 51% YoY; exports were 1,811 mt, down 82% MoM and 82% YoY; net imports stood at 23,879 mt, with cumulative net imports for the year reaching 137,000 mt. On the import side, Russia and Indonesia dominated, with Russian nickel imports reaching 7,048.77 mt, accounting for 27.44% of total imports, firmly in first place; Indonesian refined nickel imports were 6,734.48 mt, representing 26.21%. Norway (2,366.40 mt, 9.21%), South Africa (1,375.00 mt, 5.35%), Japan (969.71 mt), and Australia (900 mt) provided supplementary supply, mostly long-term contract cargoes for rigid downstream demand in specialized alloys and precision manufacturing. On the export side, the Netherlands was the largest destination, with exports of 705.29 mt accounting for 38.94% of total exports, primarily for delivery and European warehousing transit needs. Neighboring Asian countries India (501.2 mt, 27.67%) and Singapore (401.24 mt, 22.15%) ranked second and third, respectively, together accounting for nearly 89% of total exports.
Macro:
(1) US media reports: Amid escalating US-Iran conflict, the Pentagon is rushing additional F-16 and F-35 fighter jets to the Middle East. Iran's supreme leader advisor: If US military operations continue, Iran may shift to a full-scale offensive.
(2) The Ministry of Finance, the General Administration of Customs, and the State Taxation Administration issued an announcement clarifying that starting from September 1, 2026, the consumption tax policy for certain battery products will be adjusted step by step. Among them, sodium-ion batteries, solid-state batteries, fuel cells, and specific solar cells such as perovskite cells, tandem cells, and gallium arsenide cells are exempted from consumption tax.
Spot Market:
On July 20, SMM #1 refined nickel price rose 750 yuan/mt from the previous trading day. Regarding spot premiums, the average for Jinchuan #1 refined nickel was 1,650 yuan/mt, down 100 yuan/mt from the previous day; domestic mainstream brand electrodeposited nickel ranged from -300 to 500 yuan/mt.
Futures Market:
The most-traded SHFE nickel 2609 contract rose early then pulled back slightly, closing the morning session at 130,720 yuan/mt, down 0.13%.
With the escalation of the US-Iran conflict, shipping restrictions in the Strait of Hormuz have strengthened cost support for sulphur. However, refined nickel inventories remain hard to reduce, both domestic and international stocks are still at high levels, and destocking is slow. In the short term, the most-traded SHFE nickel contract is expected to trade in a range of 125,000-130,000 yuan/mt.
Nickel Sulphate
On July 20, the SMM battery-grade nickel sulphate average price remained stable.
Cost side, with ongoing uncertainty in the Strait of Hormuz, the tug-of-war between longs and shorts in nickel prices was pronounced, and the immediate cost of nickel sulphate production moved sideways. Supply side, the tight supply of intermediate products persisted, with MHP payables and auxiliary material prices such as sulphuric acid remaining high. Some smelters held expectations for production cuts, but a number of recycling enterprises released inventory. Demand side, as nickel prices fell sharply MoM and some downstream enterprises accumulated inventory, downstream restocking sentiment was weak and their acceptance of nickel salt prices was relatively low. Today, the upstream nickel salt smelter’s Willingness to Sell Sentiment Factor was 1.8, the downstream precursor plant’s Willingness to Purchase Sentiment Factor was 2.5, and the integrated enterprise sentiment factor was 2.5 (historical data can be accessed via the database).
Looking ahead, as the month-end purchase period approaches, the market is expected to gradually become more active, and nickel sulphate prices may rebound somewhat.
NPI
July 20 news, SMM’s high-grade NPI market sentiment factor was 1.99, up 0.02 MoM. The upstream sentiment factor for high-grade NPI was 2.07, up 0.01 MoM, and the downstream sentiment factor was 1.91, up 0.03 MoM. The high-grade NPI spot market today continued its tug-of-war between sellers and buyers, with a clear gap between upstream and downstream psychological price levels and overall polarized transactions. Demand side, steel mills aggressively pushed for low-price purchases, with mainstream psychological procurement levels concentrated at 1,120 yuan per nickel unit and below. Market-matched spot prices were slightly above procurement floor prices, making it difficult to realize most low-price intentions. Inquiries in the market increased, and purchasing activity recovered slightly, but overall bearish market sentiment remained. Fundamentals-wise, off-season demand for stainless steel continued to cap procurement levels. However, with thin spot liquidity and cost support from suppliers, suppliers had little willingness to concede significant discounts. Short-term market conditions are expected to continue consolidating sideways.
Stainless Steel
The stainless steel market showed a pattern of "firm spot prices, falling inventory, and recovering margins." Macro side, cooling US CPI and easing inflation expectations, combined with Indonesia’s Ministry of Energy and Mineral Resources announcing only moderate additional nickel ore quotas for the year—limited growth—meant the raw material shortage pattern persisted. SHFE nickel and SS futures stopped falling and rebounded, consolidating spot market lows. Regarding spot and inventory, mainstream steel mills held prices firm. Coupled with typhoon-related logistical disruptions and insufficient arrivals, improving transaction volumes and reduced arrivals led to a significant drawdown in social inventory, temporarily easing off-season inventory buildup pressure. However, against the backdrop of the traditional consumption off-season, terminal end-user demand remained weak, and downstream acceptance of high prices was insufficient, with spot price increases significantly underperforming futures. Cost and profit side, trends diverged between finished steel and raw materials: steel mills continued to push for lower raw material prices, high-grade NPI purchase prices were weak, and the cost center shifted downward; while finished steel drifted higher, supported by firm pricing and transactions, the widening price spread drove a notable expansion in smelting margins. This enhanced profit resilience and eased pressure on the production side. Overall, expectations of tight nickel resources provide a floor for the industry bottom, while steel mills holding prices firm solidifies the price center. Off-season restocking and reduced logistics flows support destocking, and weaker raw material costs amplify steel mill profits. However, the core contradiction of sluggish rigid demand and insufficient acceptance of high prices has not fundamentally improved, leaving spot cargo lacking sustained upward momentum.
Stainless steel product prices and production costs drifted higher in tandem, with product price gains outpacing overall raw material performance, driving a MoM expansion in steel mill smelting profits. Based on 304 cold-rolling calculations, the profit margin stood at 2.39% on current raw material costs and 1.07% on inventory raw material costs, reflecting a significant repair in spot profit resilience. From a raw material cost analysis, the cost of producing stainless steel entirely from stainless steel scrap was approximately 14,351.25 yuan/mt, while the cost based entirely on high-grade NPI reached 14,947.08 yuan/mt, with the two still maintaining a notable cost spread.
Nickel Ore:
Philippine Market:
Pricing: Overall, Philippine nickel ore market prices remained stable this week, but market sentiment weakened further as ore supply continued to increase and downstream procurement demand remained soft. Current CIF China quotes were approximately $46.25/wmt for Ni 1.3% ore, $56.5/wmt for Ni 1.4%, and $64.5/wmt for Ni 1.5%, all flat WoW. The price spread between Ni 1.3% and Ni 1.4% ore still held at around $10/wmt. Although the difference in nickel grade between the two is only 0.1 percentage point, Ni 1.4% ore offers approximately 7%–8% higher recoverable nickel metal content, delivering higher smelting efficiency and lower unit nickel production costs. Additionally, shipping, port handling, and logistics costs are largely fixed, making higher-grade ore more economical on a unit nickel cost basis. With NPI smelting profits remaining under pressure, downstream procurement continued to concentrate on ore grading Ni 1.4% and above, while Ni 1.3% ore faced mounting sales difficulty due to higher unit nickel consumption. At the same time, recent new supply additions from the Philippines were mainly concentrated in low-grade ores, leading to an accumulation of Ni 1.3% ore inventories and weighing on prices, which further widened the spread between Ni 1.3% and Ni 1.4% ore. In contrast, demand for Ni 1.4% and Ni 1.5% ore remained relatively stable.
Supply and Weather: The Philippine nickel ore market currently exhibits a pattern of increasing supply and relatively weak demand. Although the Philippines is in its rainy season, weather-related disruptions to nickel ore production have been largely limited. Recent rainfall was mainly concentrated in the western and northern parts of Luzon Island, particularly the Zambales region, while the key nickel ore-producing area of Surigao experienced generally dry weather over the past week, with only sporadic showers. Mining, land transport, and port loading operations largely continued as normal, with only some small-scale mining areas affected by localized rainfall. Over the next week, the Zambales area is expected to continue experiencing significant rainfall, which may have some impact on local mine production and logistics transportation; the Surigao area, by contrast, is forecast to remain relatively dry with only localized showers, limiting the impact on mine production and port shipments. Overall, intermittent rainfall could cause brief operational delays at some mines, but it is not expected to significantly affect overall nickel ore supply and exports from the Philippines, so the rainy season’s support for ore prices will remain relatively limited. As mine production keeps rising, market available ore continues to increase, while buyers remain cautious in purchasing, raising their ore grade requirements, and their procurement focus continues to center on mid- to high-grade ores. Sales of low-grade ores have slowed markedly, inventories at mines and ports keep growing, further suppressing market prices.
Market sentiment and outlook: Supply side, mines in the southern Philippines continue normal production and shipments, but as inventories accumulate, sales pressure keeps increasing, and some mines have gradually become more willing to negotiate prices, especially for low-grade ores. Demand side, buyers are still mainly meeting immediate production needs without actively building inventories, and overall procurement strategies remain relatively cautious against the backdrop of uncertain downstream demand. Outlook: the Philippine nickel ore market is expected to stay in the doldrums in the short term. If subsequent weather does not bring persistent heavy rainfall that tightens supply markedly and downstream demand does not improve noticeably, the ever-growing ore supply will continue to pressure the market. High-grade ores will likely still receive relatively stable demand support, while low-grade ores are expected to continue facing significant downward price pressure due to ample supply and sluggish sales.
Indonesia market:
Prices: With Indonesia’s HMA and HPM for the second half of July officially taking effect from July 15, Indonesia's local nickel ore prices have been lowered in line with the new benchmark. Limonite ore: Ni 1.2% ore CIF price around $29.5/wmt, and Ni 1.3% ore around $31.5/wmt; saprolite ore: Ni 1.4% ore CIF price around $54.9/wmt, Ni 1.5% ore around $61.2/wmt, and Ni 1.6% ore around $66.1/wmt. Affected by the HMA decline, HPM benchmark prices for all grades pulled back in tandem, and the transaction benchmark prices for Indonesia’s local ore were lowered by about $2–$3/wmt overall compared with the first half of the period. Market transactions are now largely executed based on the new HPM benchmark, and against the backdrop of ample supply and high smelter inventories, Indonesia's local nickel ore prices are expected to remain in the doldrums in the short term.
Weather: Overall, conditions in Indonesia’s main nickel ore producing areas are expected to remain relatively stable over the next week. Central Sulawesi, Southeast Sulawesi, and Halmahera are expected to see intermittent light to moderate rain, accompanied by localized thunderstorms, but the rainfall will be predominantly short-lived and intermittent, and is not anticipated to cause sustained disruptions to mine production, land transportation, or port shipments. Overall, localized rainfall may result in brief delays at individual mining sites, yet no widespread heavy rainfall is currently observed, and no significant impact on Indonesia's nickel ore supply or port shipments is expected.
In terms of supply-demand dynamics and market sentiment, Indonesia's local nickel ore market continues to exhibit an overall loose supply picture. Smelter inventories remain at relatively high levels, with pyrometallurgy-based (RKEF) smelters holding approximately 2–3 months’ worth of nickel ore inventory and hydrometallurgy-based smelters about 2 months, leaving overall restocking demand still limited.
Supply side, mines are maintaining normal production and sales. Saprolite ore supply remains ample, and RKEF smelters' procurement demand is broadly stable, but elevated inventories are capping upside room for prices. For limonite ore, HPAL project procurement demand stays steady, yet market supply continues to outpace near-term demand. Current transaction benchmark prices for limonite ore stand at around $33–35/wmt. Small and mid-sized miners have limited acceptance of these price levels and relatively low selling willingness, with actual transactions still concentrated among large miners. Following the implementation of the new HMA and HPM benchmark prices effective July 15, miners are closely monitoring the impact of the lower HPM benchmark on subsequent transaction prices. Most miners still hope to achieve a premium of $3–5/wmt over the HPM benchmark, and the bargaining tug-of-war between buyers and sellers persists.
Demand side, inventories at both pyrometallurgical and hydrometallurgical smelters remain elevated. Procurement is mainly to meet immediate production needs, without active restocking. Meanwhile, some smelters have raised their purchasing grade requirements to Ni 1.45%–1.50%, further weakening market demand for low-grade ore. Against the backdrop of abundant ore supply, high smelter inventories, and an overall decline in HPM benchmark prices, spot transactions remain generally sluggish, and a pronounced wait-and-see sentiment prevails in the market. On the whole, Indonesia's local nickel ore market continues to show a pattern of ample supply and relatively weak demand, with near-term spot purchases still largely driven by immediate requirements.
Looking ahead, the market will continue to closely watch progress on supplementary RKAB approvals, which remain a key factor affecting Indonesia's nickel ore supply in H2. Market feedback suggests that even if supplementary RKAB quotas are approved, there will still be a buffer period of about one month from approval to actual supply release, so the near-term impact on market supply will be relatively limited. If the total volume of supplementary RKAB approvals ultimately falls short of market expectations toward the end of Q3, or if the approval process continues to slow, Indonesia's domestic nickel ore prices could still find some support. In addition, as Sulawesi enters the rainy season from September to October, mining and transportation may be somewhat affected. If supply tightens, nickel ore prices in Q4 still have the potential for a periodic rebound.
