Nickel Prices Fluctuate Upward With a Relatively Stable Trend as Market Inquiries Heat Up [SMM Nickel Morning Meeting Summary]

2.7Nickel Morning Briefing

Refined Nickel:

SMM February 6 News: Spot Premiums/Discounts: Today, mainstream spot premiums for Jinchuan Nickel No. 1 were quoted at 2,300-2,800 yuan/mt (2503 contract), with an average premium of 2,550 yuan/mt, up 50 yuan from the previous trading day. Russian nickel premiums/discounts were quoted at -200 to 100 yuan/mt (2503 contract), with an average of -50 yuan/mt, unchanged from the previous trading day. Futures: On the morning of February 6, SHFE nickel continued the upward trend from the night session, surging by 2,790 yuan to 126,010 yuan, an increase of 2.26%. At the start of the new year, base metals broadly rose, with downstream stainless steel also performing strongly. Additionally, rising Indonesian nickel ore prices significantly increased costs. Under cost-based pricing logic, coupled with the strong performance of the base metals sector on the day and the recovery of nickel prices after previous deep declines, nickel prices saw a substantial increase overall.

Nickel Ore:

Philippine Laterite Nickel Ore:

On February 6, post-holiday, no new offers or transactions were reported from Philippine mines. SMM Philippine laterite nickel ore prices for 0.9% grade were $36-37/wmt, remaining stable; for 1.3% grade, prices were $38.5-40.5/wmt, with an average of $39.5/wmt, remaining stable; for 1.4% grade, prices were $43.5-48/wmt, with an average of $45.75/wmt, remaining stable; for 1.5% grade, prices were $51-53/wmt, with an average of $52/wmt, remaining stable.

Ocean Freight: SMM nickel ore ocean freight rates were $7-8/mt from the Philippines to Lianyungang and $8-9/mt from the Philippines to Tianjin Port, remaining unchanged from pre-holiday levels.

Indonesian Domestic Ore Hot Topics:

Weekly Prices: Indonesian domestic trade laterite nickel ore (1.2% grade, delivery-to-factory price) was $20.5-23.8/wmt, with an average of $22.15/wmt, up $0.15/wmt; for 1.6% grade, prices were $43.4-44.8/wmt, with an average of $44.1/wmt, up $0.1/wmt. SMM expects that in February, Indonesian domestic ore prices will rise due to higher absolute prices driven by increased premiums.

Price Trends: In February, Indonesia's HPM benchmark price saw a slight decrease of $0.68, but premiums for 1.6% grade nickel ore increased, with mainstream transaction premiums adjusted from $15-17 to $17-18, while absolute prices remained stable with slight increases. Supply: APNI reported that the approved quota for the 2025 RKAB currently stands at 298 million wmt, indicating relatively ample supply YoY. Demand: Indonesian pyrometallurgy enterprises resumed nickel ore procurement for February after the holiday. Overall, due to relatively urgent inventory levels at pyrometallurgy plants, there remains some rigid stocking demand from local smelters, tightening the previously ample supply of local nickel ore. Additionally, market expectations for Indonesian policy uncertainties persist. With the slight decrease in February's HPM benchmark price, upstream and downstream bargaining remains evident. In summary, SMM expects that in February, Indonesian domestic ore prices will rise due to higher premiums driving up absolute prices, but the increase will be limited without structural changes.

Nickel Sulphate:

On February 6, SMM battery-grade nickel sulphate index price was 26,583 yuan/mt, with a quotation range of 26,380-27,060 yuan/mt, and the average price slightly increased from the previous day.

Cost: Stimulated by Philippine macro policies, LME nickel prices rebounded to $15,650, gradually strengthening cost support. Demand: Some precursor plants have completed February inventory stocking, with some manufacturers' inventories meeting rigid demand, though procurement demand still exists. Supply: Some nickel salt smelters have not yet resumed operations, while others have started quoting and negotiating orders. Considering the current losses, nickel salt smelters generally maintain firm prices, leaving little room for price reductions. Comprehensive analysis suggests that under weak supply and demand, prices are expected to remain stable in the near term.

NPI:

On February 6, SMM 8-12% high-grade NPI averaged 943.5 yuan/mtu (ex-factory, tax included), up 1.5 yuan/mtu from the previous working day. Supply side: Domestically, Philippine nickel ore prices remained stable, while domestic smelters continued to operate at a loss, with production slightly recovering after seasonal maintenance. In Indonesia, overall production decreased in February, coupled with adjustments in production in certain major regions, leading to a slight decline in total output. Demand side: Domestic stainless steel mills' production schedules showed limited declines MoM, and with current low stainless steel scrap prices, traders' willingness to sell remained weak, increasing the proportion of NPI usage in stainless steel mills. Overall, demand for NPI remained supported. However, pre-Chinese New Year raw material stocking by stainless steel enterprises was relatively sufficient, and post-holiday stainless steel market trends still require observation. Market inquiries have yet to recover fully. In the short term, high-grade NPI prices are expected to remain relatively stable with a strong trend.

Stainless Steel:

On February 6, stainless steel electronic trading fluctuated upward, with spot prices across all series showing slight increases. Although the Chinese New Year holiday ended, the holiday atmosphere persisted, and market inventory buildup slightly increased. High-carbon ferrochrome prices rose significantly, highlighting raw material support. 304 cold-rolled in Wuxi was quoted at 13,050-13,400 yuan/mt, 304 HRC in Wuxi at 12,450-12,600 yuan/mt, 316L cold-rolled in Wuxi at 23,700-23,900 yuan/mt, 201J1 cold-rolled in Wuxi at 7,700-7,800 yuan/mt, and 430 cold-rolled in Wuxi at 7,150-7,450 yuan/mt. At 10:30, SHFE SS2503 contract price was 13,425 yuan/mt, with Wuxi stainless steel spot premiums at -205 to -145 yuan/mt (spot trimmed edge = raw edge + 170 yuan/mt).