Futures Market Fluctuated Downward, While Prices of Philippine Laterite Nickel Ore May Remain Stable or Fluctuate Upward [SMM Nickel Morning Briefing]

January 23 Nickel Morning Meeting Summary

Refined Nickel:

Spot Premiums/Discounts: Today, the mainstream spot premium quotation range for Jinchuan No. 1 nickel is 1,800-2,000 yuan/mt, with an average premium of 1,900 yuan/mt, up by 100 yuan compared to yesterday. The quotation range for Russian nickel premiums/discounts is -300 to 100 yuan/mt, with an average premium/discount of -100 yuan/mt, up by 50 yuan compared to yesterday.

Futures Market: In the morning, nickel prices dropped by 710 yuan to 127,260 yuan, a decline of 0.55%.

Today, the futures market fluctuated downward, but prices remained at high levels. In terms of market transactions, most downstream enterprises have already gone on holiday this week, resulting in minimal market transactions and weak purchase willingness from downstream buyers. Consequently, under sluggish market transactions, Jinchuan brand nickel premiums, which accelerated their decline last week, fluctuated slightly this week. Supply side, producers maintained high operating rates, ensuring sufficient supply. With a supply surplus, Jinchuan brand premiums/discounts are expected to decline further in the short term.

Price Spread with Nickel Sulphate: Today, nickel briquette prices were 126,700-127,000 yuan/mt, down by 1,025 yuan/mt compared to the previous trading day's spot prices. Nickel sulphate remains at a discount to refined nickel.

Nickel Ore:

Philippine Laterite Nickel Ore: Prices are expected to remain stable with a slight upward trend.

On January 22, SMM Philippine laterite nickel ore prices for 0.9% grade were $36-37/wmt, remaining stable; prices for 1.3% grade were $38.5-40.5/wmt, with an average price of $39.5/wmt, up by $0.5/wmt; prices for 1.4% grade were $43.5-48/wmt, with an average price of $45.75/wmt, up by $1.25/wmt; prices for 1.5% grade were $51-53/wmt, with an average price of $52/wmt, remaining stable.

Ocean Freight Rates: SMM nickel ore ocean freight rates from the Philippines to Lianyungang were $7-8/mt, and from the Philippines to Tianjin Port were $8-9/mt. After last week's decline due to a shift in shipping origins, freight rates remained unchanged today.

Spot Daily Review: Transaction prices for Bunguet and Erman mines edged upward, and prices for Philippine 1.3% and 1.4% laterite nickel ore continued their upward trend this week. Supply side: Major mining areas in the south remain in the rainy season, leading to off-season supply and fewer mine tenders in the Philippine nickel ore market. Demand side: Domestic NPI plants continue to face losses, maintaining just-in-time procurement as the primary approach, but the slight rebound in NPI prices has brought some profit recovery. It is expected that Philippine laterite nickel ore prices may remain stable with a slight upward trend in the future.

Indonesian Domestic Ore Hot Topic: Domestic ore premiums in February are expected to rise slightly.

Weekly Prices: Indonesian domestic trade laterite nickel ore (delivery-to-factory price) for 1.2% grade was $20.5-23.8/wmt, with an average price of $22.15/wmt, up by $0.15/wmt; for 1.6% grade, prices were $43.4-44.8/wmt, with an average price of $44.1/wmt, up by $0.1/wmt.

Supply side: Starting last week, most mines in Indonesia that obtained RKAB quotas have passed the Simbara system review, leading to active shipment sentiment. Demand side: Sales prices for Indonesian NPI and intermediate products have slightly increased, and production profits for downstream smelters have slightly improved. Additionally, due to inventory factors, Indonesian local smelters still have some just-in-time stocking demand.

Currently, the Indonesian domestic nickel ore market is active, and with the slight decline in February's HPM benchmark price for domestic ore, premiums in February are expected to rise slightly.

Nickel Sulphate:

On January 22, the SMM battery-grade nickel sulphate index price was 26,568 yuan/mt, with a quotation range of 26,380-27,020 yuan/mt, and the average price increased compared to yesterday.

Cost side: Today, LME nickel prices fluctuated around $16,000, providing strong cost support. Currently, profits for producing nickel sulphate from high-grade nickel matte and intermediate products have turned negative. Demand side: Most precursor plants have completed January nickel salt stocking, with only a small portion still requiring restocking. Spot order market inquiries were sluggish. Supply side: Finished product inventories at nickel salt plants are critically low, leading to tight supply. Overall, under the pattern of tight supply and rising costs, prices still have room to increase.

Nickel Pig Iron (NPI):

On January 22, SMM 8-12% high-grade NPI average price was 941 yuan/mtu (ex-factory, tax included), up by 0.5 yuan/mtu compared to the previous working day. Supply side: Domestically, high-grade NPI prices fluctuated downward, and domestic smelters remained in a loss-making phase, with production expected to decline slightly. In Indonesia, with the release of some new capacity and additional output from high-grade nickel matte conversion, high-grade NPI production is expected to increase slightly. Demand side: As the stainless steel market approaches the Chinese New Year holiday, stainless steel spot prices remained stable, and top-tier enterprises had sufficiently stocked raw materials before the holiday. Only some small and medium-sized stainless steel mills made spot orders, and demand for high-grade NPI did not show significant recovery. Cost support for high-grade NPI remains strong, and in the short term, as the market approaches the holiday, prices may still have room for recovery.

Stainless Steel:

On January 22, stainless steel electronic futures prices narrowed downward during the daytime session and then stabilized. As the Chinese New Year approaches, the second wave of concentrated holidays has begun, and winter stockpiling sentiment is strong. The market currently has significant inventory buildup, and post-holiday, the market is expected to focus on inventory digestion. 304 cold-rolled stainless steel in Wuxi was quoted at 13,000-13,300 yuan/mt, 304 HRC in Wuxi was quoted at 12,400-12,600 yuan/mt, 316L cold-rolled stainless steel in Wuxi was quoted at 23,600-23,800 yuan/mt, 201J1 cold-rolled stainless steel in Wuxi was quoted at 7,600-7,750 yuan/mt, and 430 cold-rolled stainless steel in Wuxi was quoted at 7,150-7,450 yuan/mt. At 10:30 a.m., the SHFE SS2503 contract price was 13,160 yuan/mt, and Wuxi stainless steel spot premiums were 10-310 yuan/mt (spot trimmed edge = rough edge + 170 yuan/mt).