[SMM Analysis] Nickel Intermediate Product Market Experiences Holiday Stagnation, Coefficients Remain Unchanged

During this week's Chinese New Year holiday, there were few transactions in the MHP market. On the supply side, upstream smelters have sold out their Q1 supply, and Q2 offers have not yet been released. Although traders provided sporadic offers, few deals were concluded amid a lack of clear direction from both upstream and downstream participants. On the demand side, some downstream nickel salt smelters halted production for the holiday, while other operating producers consumed raw material inventory, resulting in minimal procurement activity by enterprises. Under the overall tight supply-demand balance, MHP nickel payables and cobalt payables remained flat at high levels this week. Looking ahead, due to expectations that nickel prices will hold up well, combined with downstream resistance to high prices, nickel payables are expected to have slight downside room after the holiday, while cobalt payables are likely to remain flat at high levels.

The high-grade nickel matte market maintained a tight balance, with payables unchanged. Going forward, strong cost support for high-grade nickel matte, coupled with sellers' firm intention to hold prices firm, suggests nickel payables will likely remain flat at high levels.

For key auxiliary material sulfur, prices moved steadily this week, generally flat compared to last week. Spot sulfur trade in many Asian regions stalled noticeably due to the Chinese New Year holiday, with most buyers postponing procurement to March, leading to temporary suppression of spot demand in February. In the short term, the market is under pressure from holiday sentiment, but as smelting capacity in Indonesia continues to be released and sulfur remains a core raw material for acid production, regional long-term demand support remains solid. Prices are expected to continue moving sideways at high levels, with upside room over the longer term.

Regarding nickel prices this week, Indonesia significantly reduced its 2026 nickel ore RKAB quota to approximately 250-260 million mt, and expectations of supply tightening remain the core driver of current nickel prices, which rose MoM this week. In terms of payables, nickel prices for MHP and high-grade nickel matte increased this week, while cobalt prices for MHP also rose.