8.21 Morning Meeting Summary
Market Hot Topics:
The Ministry of Energy and Mineral Resources (ESDM) of Indonesia has begun approving revised RKAB applications for nickel mines and coal for 2026, with dozens of enterprises already approved. Tri Winarno, Director General of Minerals and Coal at ESDM, stated that some nickel miners previously suspended due to RKAB issues have been permitted to resume production. However, the additional quotas approved for nickel mines have not yet been disclosed, making it currently impossible to determine the actual impact on Indonesia's nickel ore supply. ESDM previously indicated that this RKAB revision would adopt a targeted adjustment approach, primarily aimed at alleviating undersupply of nickel ore to smelters, rather than significantly increasing overall mining quotas.
Macro:
(1) The US Treasury announced an expansion of long-term nominal treasury repurchase operations. The Treasury will at least double the single-operation maximum size of liquidity support repurchase operations for longer-dated nominal coupon treasuries to at least $4 billion, effective from September 9, 2026.
(2) After the US Treasury unexpectedly announced an increase in long-term US treasury repurchase scale, the US bond market rebounded, driving long-term yields to pull back notably. The US dollar index fell as much as 0.85% intraday, marking its largest decline in three weeks and hitting its lowest level since mid-May.
Spot Market:
On August 20, SMM #1 refined nickel averaged 130,250 yuan/mt, up 2,050 yuan/mt from the previous trading day. For spot premiums, Jinchuan #1 refined nickel averaged 1,550 yuan/mt, unchanged from the previous trading day, while mainstream domestic brands of electrodeposited nickel ranged from 0-500 yuan/mt.
Futures Market:
The most-traded SHFE nickel contract (2609) shot up in the night session and continued to consolidate at highs in the early morning session, closing at 129,560 yuan/mt as of the morning close, up 1.19%.
Driven by the US Treasury's expansion of treasury repurchase scale and a weaker US dollar, LME nickel and SHFE nickel both rose sharply, with SHFE nickel regaining the 130,000 yuan/mt mark. In the short term, the price range for the most-traded SHFE nickel contract is 125,000-130,000 yuan/mt.
Nickel Sulphate
On August 20, SMM battery-grade nickel sulphate averaged unchanged.
From the cost side, US treasury repurchase sparked expectations of loose market liquidity, leading nickel prices to retreat after a rapid rise, with immediate production costs for nickel sulphate rising; from the supply side, as costs remain high, some producers are inclined to hold prices firm, while others with high inventory levels seek to sell for destocking; from the demand side, recently some downstream enterprises primarily rely on long-term contract supply, with weak sentiment for spot order building, and relatively low acceptance of nickel salt prices. Today, the upstream nickel salt smelter's Wilngness to Sell Sentiment Factor was 2.0, the downstream precursor plant's Purchase Sentiment Factor was 2.3, and the integrated enterprise's Sentiment Factor was 2.3 (historical data can be queried via the database).
Looking ahead, the spo order market's actiity is expected to remain weak in the near term, with nickel sulphate prices generally under pressure.
NPI
August 20 news, SMM high-grade NPI market sentiment factor was 1.86, down 0.01 MoM; high-grade NPI upstream sentiment factor was 1.99, flat MoM; high-grade NPI downstream sentiment factor was 1.73, down 0.02 MoM. The high-grade NPI spot market saw sluggish trading, while futures rebounded, but the market largely questioned the sustainability of the rebound, which failed to effectiely trigger actual buying from downstream. Downstream steel mills had sluggish purchase wilngness, mostly making inquiries at low leels. Market iws showed a clear temporal diergence: near-month spot was under pressure, with olume expansion difficul; some suppliers were bullish on the September distant-month market and reluctant to sharply lower offers, holding firm to their selng intentions. Steel mills set purchasing thresholds based on their own inventory costs, only starting procurement when prices fell to low ranges. The price gap between upstream and downstream remained unnarowed, and the spot market as a whole remained in a deadlock.
Stainless steel
According to SMM August 20 news, SS futures consolidated on a strong note. Although boosted by a weaker US dollar in the night session, prices pulled back after the morning open, with a limied intraday range. At close, the most-traded contract settled at 14,300 yuan/mt. On the spot market side, following the sideways pace of SS futures, spot stainless steel quotes were largely stable, with trading remaining sluggish. Although demand weakness was hard to change, steel mill profit margins were narow, and the cost side was strengthening support for prices, also proiding a bottom.
SS futures most-traded contract. At 10:15, SS2610 was at 14,345 yuan/mt, up 85 yuan/mt from the preious trading day. Spot premiums for 304/2B in Wuxi ranged from 375 to 525 yuan/mt. In the spot market, cold-rolled 201/2B coil in Wuxi was flat on aerage; cold-rolled uncut edge 304/2B coil aerage price in Wuxi rose 25 yuan/mt, and in Foshan rose 25 yuan/mt; cold-rolled 316L/2B coil in Wuxi was flat; hot-rolled 316L/NO.1 coil in Wuxi was flat; cold-rolled 430/2B coil in both Wuxi and Foshan was flat.
This week, stainless steel futures were persistently disrupted by macro sentiment, maintaining a weak pullback trend. During the week, repeated flucuations in Indonesia's RKAB nickel ore approval news disrupted industry expectations, compounded by a hawish tone from the US Fed and unresolved US-Iran geopolitical conflicts, leading to high macro uncertainty. Multiple negatie factors coalesced to drag down SS futures during the week, with bears dominating the market, and the center of the futures steadily shifted downward. The spot market shows a pattern of weak futures-spot linkage, weak supply and demand but prominent inventory resilience, with prices overall declining and pulling back. Currently, the market remains in the traditional consumption off-season, with no signs of recovery ahead of the September-October peak season. Downstream end-users are cautious in purchasing, and market transactions are mainly spot purchases for rigid demand, without centralized restocking actions. The continuity of rigid demand is weak, making it difficult to provide upward support for spot prices. Supply side, stainless steel mills' production schedules steadily increased in August, accelerating the pace of capacity release in the industry. Against the backdrop of end-use demand not recovering simultaneously, market supply-demand pressure marginally increased. However, within the week, Typhoon "Baihaitun" directly affected east China, hindering transportation at core ports and road logistics, limiting the pace of cargo dispatch and arrival, phasically offsetting the pressure from increased supply, resulting in stainless steel social inventory remaining basically stable this week without obvious inventory buildup. The reasonable inventory configuration provided bottom support for spot prices. Cost and profit side, this week, finished steel prices pulled back along with futures, and steel mills' hold prices firm stance loosened somewhat, driving down spot quotes. But the raw material side's resilience is sufficient, effectively limiting the price decline. Within the week, NPI prices performed relatively strongly, providing strong support for stainless steel production costs, while the weak decline in finished steel prices led to a narrower price spread between finished steel and raw materials, significantly narrowing steel mills' smelting profits. Overall, the cost side's rigid support is prominent, effectively avoiding a deep decline in spot prices. The market shows an operational characteristic of "futures drop, spot weak, cost support, limited decline". Overall, the stainless steel market this week presents a game pattern of macro headwinds dragging futures, weak rigid demand in off-season, increased supply pressure, stable inventory support, and cost resilience against decline. In the short term, market fundamentals weak characteristic is clear, with steel mills gradually increasing production further amplifying future demand pressure, posing a risk of periodic pullback in prices. However, reasonable inventory levels and firm raw material costs form a double bottom support, limiting downside room. The overall market is mainly consolidating weakly. Subsequently, focus on tracking macro sentiment changes, SS futures fluctuations pace, end-user off-season rigid demand recovery progress, implementation of steel mills' production increases, and inventory turnover changes.
Nickel ore:
Philippines market:
Price side, Philippine nickel ore prices remained stable overall this week, with mainstream CIF China quotes at $46/wmt for Ni 1.3%, $56.5/wmt for Ni 1.4%, and $64.5/wmt for Ni 1.5%, all flat WoW.
Freight costs on major routes also remained unchanged: Surigao–Lianyungang $14.5/wmt, Surigao–Ningde $13.5/wmt, Zambales–Lianyungang $12.75/wmt, Zambales–Ningde $12.25/wmt. Chinese downstream smelters have relatively sufficient inventory, with limited restocking demand, and procurement remains cautious.
Weather-wise, this week some nickel ore mining areas in the Philippines were affected by typhoons and related severe weather, causing disruptions to local mine production, land transport, and port loading. Palawan and Homonbon Island were relatively less impacted overall, but some areas experienced periodic rainfall and deteriorating sea conditions, leading to delays in shipping schedules and loading pace. Zambales was more noticeably affected by heavy rainfall and strong winds, with some port operations and ore transport experiencing local disruptions. Overall, the typhoon mainly impacted local ports and shipments but did not cause widespread disruption to Philippine nickel ore supply.
Supply, demand, and market sentiment: the Philippine nickel ore market remains in a pattern of relatively ample supply and weak demand. Although the typhoon caused periodic disruptions to port and shipping operations in some areas, overall mine production and exports remained largely maintained, with spot supply generally ample. Local shipment delays may tighten some spot supply in the short term, but are not enough to change the overall market pattern of relatively ample supply.
Chinese downstream smelters have sufficient inventory, with procurement mainly for just-in-time production needs, and overall transactions were light. Philippine mines supported by freight and production costs maintained firm offers and were reluctant to significantly lower prices. However, given the relatively ample supply and limited demand recovery, low-grade nickel ore is under gradually increasing downward pressure. In contrast, high-grade nickel ore prices remain relatively firm, mainly supported by stable procurement demand from NPI smelters and the relatively tight supply-demand balance for high-grade NPI raw materials.
Looking ahead, over the next week, as the typhoon impact gradually subsides, Philippine mine production and port shipments are expected to gradually return to normal, though local ports may still experience schedule adjustments. Overall market supply is expected to remain relatively ample, while Chinese downstream will continue to mainly make just-in-time procurement, with limited demand improvement. Against a backdrop of ample supply and slow demand recovery, low-grade nickel ore prices are expected to remain under pressure, while high-grade ore prices remain relatively firm. Short-term market sentiment will likely stay cautious, and low-grade ore price trends mainly depend on Chinese downstream restocking pace, Philippine port recovery conditions, and subsequent spot supply.
Indonesia market:
Price-wise, this week is the last week of the HMA pricing cycle for the first half of August, with HMA at $16,646/mt. Affected by the recent HMA and HPM downward adjustments, Indonesian nickel ore prices were generally weak. However, due to ample market supply and high inventory at smelters, actual transaction prices were basically stable MoM. CIF prices for limonite ore were around Ni 1.2% $29/wmt and Ni 1.3% $31/wmt; saprolite ore Ni 1.4% about $52.6/wmt, Ni 1.5% about $60/wmt. Low-grade nickel ore mainstream transaction prices were approximately $31/wmt. In the near term, given ample supply and cautious procurement, nickel ore prices are expected to remain stable, and the market continues to watch the additional RKAB quota and its impact on supply.
Weather conditions, the weather in major nickel ore producing areas of Indonesia was largely under control. Morowali and Konawe experienced intermittent rainfall, but it did not significantly impact mining, transportation, or port operations. Halmahera saw relatively more rainfall, with localized heavy rain potentially causing periodic disruptions to mining and logistics, but no widespread supply outages occurred. Obi Island also had intermittent rainfall, and overall mining and loading activities remained normal. Overall, weather had limited impact on Indonesia’s nickel ore supply and logistics this week.
Supply-demand and market sentiment, supply in the Indonesian nickel ore market was still ample, with saprolite ore inventory continuing to edge up. Meanwhile, limonite ore inventory declined as some HPAL projects gradually ramped up production. Currently, most smelters’ inventories could still last about two months, reducing the need for additional spot purchases.
Policies and RKAB, this week the Indonesian nickel ore market continued to focus on the additional RKAB quota for 2026. ESDM still stressed that RKAB adjustments must be evaluated based on actual production, downstream industrial demand, market conditions, and the overall supply-demand balance, and are not automatically relaxed.
The Indonesia Nickel Miners Association (APNI) proposed adding 30 million tonnes of strategic buffer quota on top of the existing approximately 270 million tonnes of RKAB, bringing the potential total to around 300 million tonnes. APNI noted that as Indonesia’s smelting capacity continued to expand, the nickel ore volume required for around 80 smelters operating at full capacity could reach about 315 million tonnes per year, thus necessitating additional buffer space.
Meanwhile, Weda Bay Nickel (WBN)’s additional RKAB became another focus this week. Earlier, the market had rumored that WBN might receive an additional approximately 25 million tonnes of quota, but ESDM had not yet officially confirmed this additional quota, so it should not be counted as approved supply for now. Subsequent RKAB adjustments for WBN will remain a key variable affecting Indonesia’s saprolite ore supply and market sentiment.
Overall, government policy remained centered on balancing downstream raw material demand with mineral resource control. Whether the 30 million tonnes buffer quota proposed by APNI and WBN’s additional quota are ultimately approved will directly affect nickel ore supply expectations for H2.
Looking ahead, in the coming week, Indonesian nickel ore prices are expected to consolidate on a subdued note. Ample supply, high smelter inventories, and cautious procurement will continue to cap upside room. The market will continue to monitor the approval of new RKAB additions and the 30 million tonnes strategic buffer quota proposal by APNI. If a large number of new quotas are approved, the increased supply could further depress ore prices; if the approval progress is slower or quota releases are limited, high-grade saprolite ore prices may receive some support. The market is expected to remain in a wait-and-see mode in the short term.
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