9.29 Morning Meeting Minutes
Market hot topics:
On September 28, the Indonesian nickel ore market remained generally stable, with prices for major grades all flat: 1.2% nickel: $26.5/wmt, flat; 1.3% nickel: $28.5/wmt, flat; 1.4% nickel: $51.8/wmt, flat; 1.5% nickel: $58.5/wmt, flat; 1.6% nickel: $63.4/wmt, flat. In terms of market conditions, new RKAB quotas for 2026 are being approved and released gradually, but the total volume of new quotas for the year has yet to be officially announced, with market attention gradually shifting to actual mine production and nickel ore shipment conditions. Meanwhile, water shortages triggered by El Niño continued to affect the nickel industry in Sulawesi. Since September 22, operating rates at some RKEF production lines at IMIP have dropped by about 30%–40%. SMM expects that if the impact lasts for half a month, nickel pig iron production could fall by about 50,000–70,000 mt of physical content, corresponding to about 5,500–7,700 mt of nickel metal content. As of September 28, no nickel smelter in Sulawesi had declared force majeure.
Macro:
(1) The China-US presidential meeting reached eight-point consensus. The two sides agreed to build a "constructive strategic stability relationship between China and the US based on respect, fairness, and reciprocity"; on trade and economic issues, they reached a "30 billion US dollar" reciprocal tariff reduction arrangement, established and advanced a trade council mechanism, extended the Kuala Lumpur consultation outcomes and instructed their implementation; agreed to establish a China-US AI dialogue (next dialogue to be held in November) and an AI incident communication channel; and put reciprocal presidential visits to APEC/G20 meetings on the agenda. The overall tone of the meeting was positive, but the "buy the expectation, sell the fact" characteristic was evident.
(2) US-Iran negotiations remained volatile, with oil prices falling first and then rebounding. The prospect of reopening the Strait of Hormuz briefly knocked down oil prices. Last Friday, WTI fell 2.33% to $92.41/barrel (down nearly 4% for the week, the largest weekly decline in seven weeks); however, Trump rejected Iran's "seven-day ceasefire proposal" and said he was "always considering" resuming military strikes. Negotiations are expected to continue this week, and WTI rebounded 1.19% at Monday's open to $93.51. Iran said it was prepared for a resumption of hostilities but had not abandoned diplomatic channels.
(3) US Treasuries posted their worst week in 19 months. Last Friday, the 10-year Treasury yield surged above 5.22% intraday (a new high since 2007), and the 30-year broke above 5.5% (a new high since 2004), rising for four consecutive weeks; Japanese and US officials sent signals that a "weak yen is problematic," and the yen rebounded more than 1% intraday. US stocks stopped falling and rebounded on Friday, with the Dow up 0.93% and the S&P 500 up 0.51%. Gold futures halted a four-day losing streak but still fell more than 2% for the week.
Spot market:
On September 28, the average price of SMM #1 refined nickel was 125,700 yuan/mt, down 1,200 yuan/mt from the previous trading day. In terms of spot premiums, the average premium for Jinchuan #1 refined nickel was 3,800 yuan/mt, up 100 yuan/mt from the previous trading day, while mainstream domestic brands of electrodeposited nickel ranged from 0 to 500 yuan/mt.
Futures market:
The most-traded SHFE nickel 2610 contract opened lower and moved lower in early trading, closing the morning session at 123,640 yuan/mt, down 1.21%.
Short-term outlook:
US Treasury yields surged above 5.2% and the US dollar remained strong, putting macro pressure back in the driver's seat. Combined with a sharp LME inventory buildup during the Mid-Autumn Festival holiday, SHFE nickel opened lower today in a catch-up decline. Funds may remain in a wait-and-see mood ahead of the holiday. In the short term, the most-traded SHFE nickel contract is expected to trade in the 123,000-126,000 yuan/mt range.
Nickel sulphate
On September 28, SMM battery-grade nickel sulphate average prices declined.
Cost side, renewed macro rate hike pressure, combined with a sharp LME inventory buildup during the Mid-Autumn Festival holiday, triggered a catch-up decline in nickel prices, pulling back spot production costs for nickel sulphate. Supply side, some producers held relatively high inventory levels and sought production cuts to destock, with overall supply edging lower. Demand side, ahead of the holiday, some downstream enterprises paused spot purchases and continued to rely mainly on long-term contracts, showing relatively low acceptance of nickel salt prices. Today, the Willingness to Sell Sentiment Factor for upstream nickel salt smelters was 2.1, the purchase sentiment factor for downstream precursor producers was 2.1, and the sentiment factor for integrated enterprises was 2.2 (historical data available in the database).
Looking ahead, hindered transportation during the Mid-Autumn Festival and National Day holidays is expected to keep spot order market activity weak in the short term, with nickel sulphate prices under overall pressure.
NPI
On September 28, the SMM high-grade NPI market sentiment factor was 1.83, flat MoM. The upstream sentiment factor for high-grade NPI was 1.93, flat MoM, and the downstream sentiment factor for high-grade NPI was 1.72, flat MoM. Approaching the holiday, overall trading activity in the NPI market visibly pulled back, with wait-and-see sentiment rising and some traders and steel mills already on holiday. Market divergence has narrowed somewhat, with spot prices locked in range-bound trading. Downside is limited, but upward rebounds lack strong support. Most suppliers maintained original offer prices for shipments and remained cautious about the outlook. Downstream steel mills had largely completed pre-holiday stockpiling, with weak purchase willingness and low psychological price levels, showing insufficient acceptance of high-priced cargoes. Market supply was ample, with transactions concentrated in the low-price range and few deals at high quotes. Overall, market fluctuations narrowed before the holiday as participants awaited further guidance from post-holiday demand.
Stainless Steel
According to SMM on September 28, SS futures consolidated on a subdued note, without clearly following SHFE nickel lower. By the close, the most-traded SS contract settled at 13,815 yuan/mt. In the spot market, although the Mid-Autumn Festival holiday had ended, the National Day holiday was approaching. Most pre-holiday stockpiling had already been completed, and with some downstream users also on holiday, pre-holiday purchasing sentiment was sluggish. Despite news of expected production cuts at stainless steel mills and NPI production cuts in Indonesia, spot stainless steel prices remained largely stable amid weak demand.
SS futures most-traded contract. At 10:15 a.m., SS2611 was quoted at 13,825 yuan/mt, up 65 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 395-745 yuan/mt. In the spot market, the average price of Wuxi cold-rolled 201/2B coil was flat; for cold-rolled uncut edge 304/2B coil, the Wuxi average was stable and the Foshan average was flat; Wuxi cold-rolled 316L/2B coil prices were flat; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; cold-rolled 430/2B coil in both Wuxi and Foshan was flat.
This week, SS futures rebounded from lows and consolidated in a recovery pattern, with improving macro sentiment driving the pace of the futures market. Earlier, under pressure from macro headwinds and sluggish demand, futures fell sharply and hit a year-to-date low of 13,290 yuan/mt. After the US Fed's rate hike landed, previously accumulated macro headwinds were largely released, market pessimism eased, and SS futures saw a sustained recovery, breaking away from the prior one-sided decline and stabilizing with a rebound from lows. The spot market continued its weak tone as the peak season failed to materialize, with demand-side recovery remaining insufficient. Futures and spot markets showed a divergence of recovering sentiment but weak rigid demand. The expected recovery of the traditional "September peak season" has been completely disproven, with no meaningful growth in end-user recovery. Additionally, with the Mid-Autumn Festival and National Day holidays approaching, downstream pre-holiday stockpiling willingness was subdued, leaving overall market trading sluggish and confidence weak. However, the bargaining power for pre-holiday rigid demand purchases weakened marginally, and spot prices completed a low-level recovery in line with futures. On the supply side, news of stainless steel mill production cuts in September and October continued to materialize, slowing the pace of capacity release. Meanwhile, affected by weather disruptions, Indonesian NPI production was expected to see periodic pullbacks, limiting the downside for NPI and providing bottom support for futures and spot prices. Costs and margins continued to recover, further easing the pressure of inverted margins at steel mills, while the cost side constrained the upside for prices. This week, mainstream steel mills announced the October steel mill tender price for high-carbon ferrochrome, abandoning the year-long strategy of securing supply and holding prices firm, with a sharp cut of 200 yuan/mt that fell below the production cost line of ferrochrome enterprises, further loosening the cost support for the chrome series. Meanwhile, NPI prices continued to pull back, and the decline in raw material prices kept shrinking steel production costs, driving a continued repair of the losses at stainless steel mills. Overall, this week the stainless steel market presented a game of macro headwinds materializing, futures repairing at lows, peak-season demand being falsified, weak pre-holiday restocking, marginal supply contraction, and repair of losses. In the short term, persistently weak end-use demand and subdued market confidence remain the core constraints, and with no strong bullish support from fundamentals, stainless steel prices severely lack upward momentum for further gains. However, with macro headwinds largely priced in for the current phase, steel mills expected to cut production, social inventory remaining at reasonably low levels, and spot prices at yearly lows, the momentum for a deep decline has largely dissipated. On balance, both upward and downward logic in the current stainless steel market is constrained, and the market as a whole has fallen into a low-level consolidation pattern where it is difficult to rise or fall, with the short-term trend likely to continue as weak repair and sideways movement.
Nickel ore:
Philippines market:
In terms of prices, CIF China prices for Philippine nickel ore showed no significant changes this week, with Ni 1.3%, 1.4%, and 1.5% still quoted at $45/wmt, $55/wmt, and $63.5/wmt, respectively. In contrast, CIF Indonesia prices declined, with Ni 1.3% and 1.4% falling to $40/wmt and $50/wmt, respectively. Indonesian domestic nickel ore prices continued to weaken, while RKAB supply expectations gradually turned more ample, putting further pressure on prices for Philippine ore entering the Indonesian market. Raw material inventories at Chinese downstream smelters remained relatively sufficient, and procurement was mainly restocking-driven, leaving overall CIF China trading activity subdued. As a result, Philippine ore prices have yet to see a notable rebound from seasonal supply contraction.
In terms of weather, conditions in the main nickel ore producing areas of the Philippines remained generally manageable this week, but Zambales has already been noticeably affected by the rainy season. Rainfall has now had a tangible impact on local mine production and logistics, with some mines already unable to berth and load vessels normally, and shipment capability in Zambales has declined markedly. Therefore, Zambales should no longer be viewed simply as a short-term weather disruption, but rather as a seasonal supply contraction factor. As the rainy season continues, local ore production, road transport, port operations, and vessel loading are all likely to remain constrained.
In contrast, weather in other major mining areas such as Palawan remained generally manageable, and they still retain some shipment capability, which can partially offset the decline in supply from Zambales. Therefore, the current Philippine market is more clearly characterized by regional supply divergence: Zambales supply has already been materially constrained by the rainy season, while other major mining areas have not yet experienced supply disruptions of the same magnitude. Overall Philippine export supply is expected to gradually decline, but a comprehensive supply tightness has not yet materialized.
In terms of supply-demand and market sentiment, the Philippine nickel ore market is currently in a state where Zambales supply contraction coexists with relatively weak downstream demand. The inability to berth and load vessels normally at Zambales will reduce short-term spot supply, but inventory in the Chinese market is relatively ample and procurement remains primarily need-based, so the supply reduction has not yet clearly translated into higher CIF China prices. Meanwhile, the situation in the Indonesian market is more pronounced: local Indonesian nickel ore prices continue to weaken, with 1.2% limonite ore prices having fallen to $26.5/wmt, while 1.3-1.4% ore supply is relatively ample, putting Philippine ore under greater price competition pressure in the Indonesian market.
Indonesian market:
In terms of prices, Indonesian nickel ore prices were broadly in the doldrums this week, with low-grade limonite ore prices falling further. The latest CIF prices at main Indonesian ports for Ni 1.2%, 1.3%, 1.4%, 1.5%, and 1.6% nickel ore were $26.5, $28.5, $51.8, $58.5, and $63.4/wmt, respectively. Among these, Ni 1.2% fell by $0.5/wmt from the previous period, while prices for other major grades were basically stable. The continued weakness in 1.2% limonite ore prices was mainly driven by the combined impact of the downward revision to the new HPM formula, expectations of RKAB growth, and weak restocking demand from the HPAL side. Current raw material inventory at smelters remains relatively ample, spot procurement is primarily need-based, and the low-grade ore market is under more evident pressure.
In terms of supply, the market continued to focus this week on the actual release of the 2026 supplementary RKAB quotas. Some newly added quotas have recently entered the market gradually, but the government has not yet announced the full scale of the additional quotas, and market attention has gradually shifted from "whether RKAB will be increased" to whether approved quotas can be converted into actual production and shipments. If more large mines complete approvals and resume normal production going forward, there is still room for Q4 ore supply expectations to ease further.
Regarding Vale Indonesia, ESDM had previously approved Vale's first-phase 2026 RKAB, and Vale subsequently applied for additional production quotas. ESDM Minister Bahlil Lahadalia stated that the government did not cut Vale's previous quotas; rather, the company applied for further quota increases after receiving first-phase approval. The scale of the subsequent addition and the final approval outcome remain to be confirmed.
Demand side, smelter raw material inventories remained relatively sufficient overall, with spot purchases mainly for immediate needs. Ni 1.3–1.4% ore supply was relatively ample, with some demand still supplemented by imported ore from the Philippines; high-grade ore saw continued strong procurement competition due to relatively limited local supply. Overall demand had not yet improved significantly, so the potential supply increase from newly approved RKAB quotas still exerted some pressure on ore prices.
On El Niño and water resources, important new developments emerged in the market this week. Indonesia is currently affected by a strong El Niño and a prolonged dry season, with significantly below-normal rainfall in some areas and further increasing pressure on water supply. The strong El Niño combined with the dry season has kept many parts of Indonesia persistently dry, with some areas seeing more than 60 consecutive days without rain, and low-to-moderate rainfall may persist for some time.
This impact has begun to transmit from weather conditions to nickel smelting production. This week, IMIP confirmed that some nickel smelting facilities in the Morowali Industrial Park reduced production due to water shortages caused by El Niño, mainly because insufficient industrial water affected equipment cooling and operations. An SMM survey showed that some RKEF production lines have been running at about 30–40% of normal levels since September 22, but no full-park shutdown has occurred so far, and enterprises are seeking alternative water sources.
Policy side, RKAB remained the core variable on the supply side. The market has entered a phase of gradual release of supplementary RKAB quotas, but since the total newly approved quota volume has not been officially announced, actual supply growth remains uncertain. If new quotas for large mines are gradually realized and converted into actual shipments, supply-side pressure will increase further; at the same time, however, water shortages caused by El Niño may limit operating rates at some smelters, thereby constraining actual ore demand to some extent.
Looking ahead, the Indonesian nickel ore market this week showed a pattern of “expectations of looser ore supply and pressure on low-grade ore prices, while downstream smelting is constrained by El Niño-related water shortages.” Ni 1.2% limonite ore fell further this week to $26.5/wmt, down $0.5/wmt from the previous period, marking the main price change.
Market side, the price spread between Philippine ore and Indonesian domestic ore is becoming an important factor influencing future trade flows. If Indonesian domestic 1.3–1.4% ore prices continue to weaken, the economics of Philippine ore entering Indonesia will be further compressed, and Philippine mines may need to lower offers or accept lower premiums to maintain transactions. Meanwhile, Zambales was unable to load normally due to the rainy season, which will limit short-term supply of some low-grade and medium-grade ore, creating a partial offset between the overall decline in Philippine supply and the downward trend in Indonesian prices.
Looking ahead, the Philippine nickel ore market is expected to maintain the pattern of "limited supply from Zambales, normal shipments from other mining areas, stable CIF China prices, and continued pressure on CIF Indonesia" over the coming week. The impact of the rainy season in Zambales has shifted from a potential weather risk to actual shipment restrictions, and its subsequent supply and the timing of loading resumption warrant close attention. Other mining areas such as Palawan can still provide some supplementary supply, so it is not enough to conclude that the Philippines is experiencing a significant overall supply shortage. Meanwhile, weaker local ore prices in Indonesia and expectations of RKAB growth will continue to cap the price upside for Philippine ore in the Indonesian market. Going forward, close attention should be paid to the timing of Zambales' return to port and loading resumption, Palawan shipments, Philippine CIF Indonesia prices, Indonesia's local 1.3–1.4% ore prices, and the price spread between Philippine ore and Indonesia's local ore.
