7.23 Morning Meeting Minutes
Market Hot Topics:
On July 21, Vale officially released its Q2 2026 financial results. Benefiting from capacity releases at core projects in Brazil and Canada, the company delivered a strong operational performance in Q2, with key figures as follows: Nickel production hit a five-year high: Q2 2026 finished nickel production reached 42,000 mt (42.0 kt), up 4% YoY, the best Q2 production record since 2020. Sales rose to 44,400 mt: Q2 nickel sales reached 44,400 mt (44.4 kt), up 7.2% YoY. Sales exceeded production by 2,400 mt. Realized selling price rebounded QoQ: Q2 average realized nickel price was $18,061/mt, driven higher by LME average prices, up $1,046/mt QoQ.
Macro:
(1) Indonesia's Finance Minister Purbaya, in his concluding speech during the bill debate on Tuesday, stated that the establishment of the Indonesia International Financial Center (PFII) will attract foreign capital flows and sustainable investment portfolios, which will serve as a long-term financing source, expand the national economy, and enable faster economic growth for Indonesia.
(2) The US Trade Representative hinted that the federal government will soon introduce new tariff policies to replace the soon-to-expire 10% universal import tariff.
Spot Market:
On July 22, the SMM #1 refined nickel average price was 131,200 yuan/mt, up 950 yuan/mt from the previous trading day. Regarding spot premiums, the average for Jinchuan #1 refined nickel was 1,500 yuan/mt, down 150 yuan/mt from the previous trading day. Mainstream domestic electrodeposited nickel brands ranged from -300 to 500 yuan/mt.
Futures Market:
The most-traded SHFE nickel 2609 contract drifted higher in early trading, closing the morning session at 131,860 yuan/mt, up 1.36%.
Base metals strengthened across the board, with funds buying into undervalued varieties on dips, driving nickel prices to a phase of valuation recovery. Meanwhile, the nickel futures market drifted higher on Indonesia quota news.
Nickel Sulphate
On July 22, SMM battery-grade nickel sulphate average price held steady.
Cost side, uncertainties over the Strait of Hormuz and nickel ore quotas persist, with a significant tug-of-war between longs and shorts in nickel prices, causing spot production costs for nickel sulphate to consolidate. Supply side, the tight supply of intermediate products remains unchanged, with MHP payables and auxiliary materials such as sulphuric acid prices still elevated. Some salt plants face expectations for production cuts, while some recycling enterprises release inventories. Demand side, due to the sharp MoM decline in nickel prices and some downstream inventory accumulation, downstream stockpiling sentiment is weak, and their acceptance of nickel salt prices is relatively low. Today, the Willingness to Sell Sentiment Factor for upstream nickel salt smelters was 1.8, the Procurement Sentiment Factor for downstream precursor plants was 2.5, and the sentiment factor for integrated enterprises was 2.5 (historical data can be accessed via the database).
Looking ahead, as the month-end procurement period approaches, the market is expected to gradually regain activity, and nickel sulphate prices may rebound.
NPI
July 22 news, SMM’s high-grade NPI market sentiment factor was 2.03, up 0.03 MoM; the upstream sentiment factor for high-grade NPI was 2.09, up 0.02 MoM; and the downstream sentiment factor for high-grade NPI was 1.96, up 0.02 MoM. The high-grade NPI spot market remained in a stalemate today, with spot transactions still scarce and price disagreements between upstream and downstream failing to narrow. Supply side, some traders slightly raised indicative offers, and quotes for various grades maintained a tiered structure. Spot fixed-price deals were few in the short term, and the market’s trading focus gradually shifted to forward cargoes, with more inquiries and negotiations for September delivery futures. Forward orders generally adopted pricing based on the average futures price plus premiums, making direct fixed-price deals difficult. Demand side, under the continued off-season impact, steel mills maintained a cautious procurement stance, waiting for further market clarity. There were some distant-month stockpiling moves, but these were still in the negotiation stage and had not yet formed bulk transactions.
Stainless Steel
According to SMM on July 22, SS futures showed a narrow consolidation pattern overall. Although the night session was weak, after the morning open they drifted higher. As of the midday close, the most-traded SS contract settled at 14,825 yuan/mt. Spot market side, buoyed by the SS morning drift higher, market confidence improved somewhat, traders raised stainless steel spot offers, and market inquiry activity increased.
SS most-traded futures contract. At 10:15 a.m., SS2609 was at 14,795 yuan/mt, up 55 yuan/mt from the previous trading day. The spot premiums for 304/2B in Wuxi were in the 225-625 yuan/mt range. In the spot market, the average price for Wuxi cold-rolled 201/2B coil rose by 50 yuan/mt; for cold-rolled 304/2B coil with uncut edge, the Wuxi average rose by 50 yuan/mt and the Foshan average rose by 50 yuan/mt; cold-rolled 316L/2B coil prices in Wuxi were flat; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; and cold-rolled 430/2B coil prices in both Wuxi and Foshan were flat.
This week, macro side, US CPI data pulled back, inflation expectations cooled, and market risk appetite modestly recovered. Additionally, Indonesia’s Ministry of Energy and Mineral Resources confirmed that nickel ore production quotas for the year would only see a small additional increase, meaning limited growth and the tight raw material supply pattern would persist, providing solid bottom support for the spot market and driving SHFE nickel and SS futures to stop falling and rebound. In terms of spot and inventory, steel mills held prices firm to provide a floor, coupled with improvements in both transactions and arrivals, spot prices steadily strengthened, and inventory saw significant destocking. This week, mainstream steel mills were steadfast in holding prices firm, effectively stabilizing market trading sentiment. The market remained in the traditional consumption off-season, with overall weak end-user rigid demand. Downstream buyers showed insufficient acceptance of high-priced materials after price hikes, and cautious wait-and-see sentiment persisted, limiting spot price gains, with the increase notably lagging behind the futures. However, buoyed by a rebound in the futures, the “rush to buy amid continuous price rise and hold back amid price downturn” sentiment heated up, end-user phased restocking demand was released, and the on-site transaction atmosphere markedly improved from the previous sluggish pattern. Meanwhile, typhoon weather disrupted logistics transportation this week, leading to insufficient spot arrivals and a slower pace of material replenishment. Warming transactions coupled with reduced arrivals effectively accelerated spot destocking, driving stainless steel social inventory to pull back significantly this week. The inventory buildup pressure during the off-season that had been weighing on the market was partially relieved, and spot fundamentals improved marginally. Cost and profit side, product and raw material price trends diverged this week, with steel mill smelting profits recovering MoM and the profit environment continuing to improve. During the week, steel mills maintained pressure for lower raw material prices, high-grade NPI procurement prices remained in the doldrums, and the raw material cost center steadily shifted downward. On the spot side, supported by mills holding prices firm and warming transactions, product prices drifted higher, the price spread between products and raw materials continued to widen, directly driving a notable expansion in stainless steel smelting profit margins. Overall industry profit resilience further strengthened, and profit pressure on the production side continued to ease. Overall, the stainless steel market this week featured firm spot prices, inventory pullback, and profit recovery. Tight nickel resource expectations provided a floor for the industry bottom, mills holding prices firm consolidated the spot price center, phased off-season restocking and logistics reductions drove inventory destocking, and weak raw material prices further expanded steel mills' profit margins. However, the core issues of weak off-season rigid demand and insufficient acceptance of high prices have not fundamentally improved, leaving spot prices lacking momentum for sustained significant increases.
Nickel Ore:
Philippines Market:
In terms of prices, Philippine nickel ore market prices were stable overall this week, but with ore supply continuing to increase and downstream procurement demand being weak, market sentiment weakened further. Currently, Ni 1.3% ore CIF China was quoted around $46/wmt, Ni 1.4% at $56.5/wmt, and Ni 1.5% at $64.5/wmt, all flat from last week. The price spread between Ni 1.3% and Ni 1.4% ore remained at about $10/wmt. Although their nickel grades differ by only 0.1 percentage points, Ni 1.4% ore can provide about 7%–8% higher recoverable nickel metal content, with higher smelting efficiency and lower nickel production cost per unit. Meanwhile, ocean freight, port handling, and logistics costs are essentially fixed, making high-grade ore more cost-effective in terms of per-unit nickel cost. Against the backdrop of persistently pressured NPI smelting profits, downstream procurement remains concentrated on ore with Ni 1.4% and above, while for Ni 1.3% ore, due to higher per-unit nickel consumption, sales difficulties continue to increase. Meanwhile, the recent new supply from the Philippines is mainly concentrated in low-grade ore, leading to a continuous buildup of Ni 1.3% ore inventories, with prices under pressure, further widening the price spread between Ni 1.3% and Ni 1.4% ore; in contrast, demand for Ni 1.4% and Ni 1.5% ore remains relatively stable.
In terms of supply and weather, the Philippine nickel ore market currently shows a pattern of continuously increasing supply and relatively weak demand. Although the Philippines is currently in the rainy season, the impact of weather on nickel ore production is generally limited. Recent rains have been mainly concentrated in the western and northern parts of Luzon, especially in the Zambales area, while in the Philippines' main nickel ore-producing area, Surigao, weather has been generally drier over the past week, with only scattered showers. Mining operations, land transportation, and port loading have largely remained normal, with only some small mining sites affected by localized rainfall. Over the coming week, the Zambales area is expected to continue to see relatively significant rainfall, which may impact some local mine production and logistics transportation; while Surigao is expected to remain relatively dry, with only localized showers, having limited impact on mine production and port shipments. Overall, intermittent rainfall may cause brief operational delays at some mining sites, but is not expected to significantly impact the overall nickel ore supply and exports from the Philippines, so this round of the rainy season still provides limited support for ore prices. As mine production continues to ramp up, the available ore supply in the market keeps increasing, while buyers remain cautious in procurement and increasingly demanding in ore grade requirements. Procurement remains centered on mid- to high-grade ore, with sales of low-grade ore slowing markedly, and mine and port inventories continue to rise, further suppressing market prices.
Market sentiment and outlook, in terms of supply, mines in southern Philippines continue to maintain normal production and shipments, but with inventories accumulating, sales pressure is steadily increasing, and some mines have gradually become more willing to negotiate prices, especially for low-grade ore. On the demand side, buyers remain focused on meeting immediate production needs and are not actively building inventory, and against a backdrop of uncertain downstream demand, the overall procurement strategy remains cautious. Outlook-wise, the Philippine nickel ore market is expected to remain in the doldrums in the short term. If no persistent heavy rains lead to a significant tightening of supply and downstream demand does not improve markedly, the continuously increasing ore supply will continue to put pressure on the market. High-grade ore is expected to continue receiving relatively stable demand support, while low-grade ore may face significant downward price pressure due to ample supply and sluggish sales.
Indonesia market:
In terms of prices, since the second-half July HMA and HPM for Indonesia took effect on July 15, Indonesia's local nickel ore prices have been adjusted downward in line with the new benchmarks. For limonite ore, Ni 1.2% ore CIF price is around $29/wmt, and Ni 1.3% ore is around $31/wmt; for saprolite ore, Ni 1.4% ore CIF price is around $54.9/wmt, Ni 1.5% ore is around $61.2/wmt, and Ni 1.6% ore is around $66.1/wmt. Affected by the HMA decline, the HPM benchmarks for all grades pulled back in tandem, with Indonesia's local ore transaction benchmarks lowered by about $2–3/wmt overall compared with the first half of the month. Current market transactions are largely executed based on the new HPM benchmarks, and against a backdrop of ample supply and sufficient smelter inventories, Indonesia's local nickel ore prices are expected to remain in the doldrums in the near term.
Weather: Over the coming week, weather in Indonesia's major nickel ore mining areas is expected to stay relatively stable overall. Central Sulawesi, Southeast Sulawesi, and Halmahera are expected to see intermittent light to moderate rain with localized thunderstorms, but the rainfall will be mostly short-lived and intermittent, and is not expected to have a sustained impact on mine production, road transportation, or port shipments. Overall, localized rainfall may cause temporary delays at some mining operations, but there are currently no widespread heavy rain events, and no significant impact on Indonesia's nickel ore supply and port shipments is anticipated.
Supply-demand and market sentiment: Indonesia's local nickel ore market remains in an overall ample supply situation. Smelter inventories are still at high levels, with saprolite (RKEF) smelters holding nickel ore inventories sufficient for about 2–3 months of production, and hydrometallurgy plants having inventories for about 2 months of production. Overall restocking demand remains limited.
Supply side, mines are maintaining normal production and sales, saprolite ore supply stays ample, and RKEF smelter procurement demand is generally stable, but high inventories cap price upside. For limonite ore, HPAL project procurement demand remains steady, but market supply still exceeds short-term demand. The current limonite ore transaction benchmark is around $33–35/wmt, small and medium-sized miners have limited acceptance of current prices and relatively low selling willingness, with actual transactions still mainly concentrated among large miners. With the new HMA and HPM benchmarks taking effect on July 15, miners continue to monitor the impact of the lower HPM benchmarks on subsequent transaction prices. Most miners still hope for transaction prices $3–5/wmt above the HPM benchmark, and the bargaining tug-of-war between buyers and sellers continues.
Demand side, inventories at both pyrometallurgical and hydrometallurgical smelters stayed high, and procurement remained primarily to meet immediate production needs, without active restocking. Meanwhile, some smelters have raised their procurement 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 downward adjustment of the HPM benchmark price, spot transactions remained generally sluggish, with a strong wait-and-see sentiment in the market. Overall, Indonesia's domestic nickel ore market continued to show a pattern of ample supply and weak demand, with short-term spot purchases still driven mainly by rigid demand.
Market outlook, the market will continue to focus on the progress of supplementary RKAB approvals, which remains a key factor affecting Indonesia's nickel ore supply in H2. According to market feedback, even if supplementary RKAB approvals are granted, there is still a buffer period of about one month from approval to the actual release of supply, limiting the near-term impact on market supply. If the total approved volume of supplementary RKAB at the end of Q3 falls short of market expectations, or if the approval process continues to slow down, Indonesia's domestic nickel ore prices are still expected to receive some support. Additionally, as Sulawesi enters the rainy season in September-October, mining and transportation may be affected to some extent. If supply tightens, there is still potential for a phased rebound in nickel ore prices in Q4.
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