Nickel Sulphate Prices Stable, Precursor Demand Weak [SMM Nickel Morning Brief]

February 14 Nickel Morning Meeting Summary

Refined Nickel:

SMM February 13 News: Spot premiums/discounts: Mainstream spot premiums for Jinchuan Nickel No. 1 were quoted in the range of 2,000-2,300 yuan/mt, with an average premium of 2,150 yuan/mt, up 100 yuan compared to the previous trading day. Russian nickel premiums/discounts were quoted in the range of -100 to 100 yuan/mt, with an average premium of 0 yuan/mt, up 50 yuan compared to the previous trading day. Futures: Nickel prices opened lower in the morning, with a decline of 0.16%, reaching a low of 124,010 yuan/mt. Regarding spot premiums/discounts: Jinchuan brand nickel premiums rose slightly compared to yesterday, possibly influenced by domestic fiscal policies, with market sentiment relatively high. Spot premiums/discounts for other nickel plate brands in the spot market showed little overall change. Today, nickel prices experienced a process of "decline-rebound-pullback" after opening. Jinchuan brand nickel premiums saw a slight increase. Spot premiums/discounts for other nickel plate brands remained largely stable this month. In the short term, attention should be paid to changes in the nickel surplus situation, with the most-traded contract expected to fluctuate within the range of 120,000-130,000 yuan. Regarding the price spread with nickel sulphate: Today, nickel briquette prices were 123,750-124,250 yuan/mt, with an average price of 124,000 yuan/mt, down 50 yuan/mt compared to the previous trading day's spot price. Nickel sulphate remains at a discount to refined nickel.

Nickel Ore:

Supply side, currently, Indonesia has approved 207 RKABs, with data reportedly released by APNI indicating that the approved RKAB quota for 2025 is 298 million wmt. In January, most mines successfully passed SIMBARA system reviews, with normal shipping and delivery. Demand side, the issuance of temporary quotas and reduced premiums in Q4 2024 left downstream smelters with about one month's worth of raw material inventory. From a supply and demand perspective, domestic trade ore supply in Indonesia is relatively ample, with increased market circulation. Compared to the same period at the beginning of last year, the supply looseness is relatively evident. However, as downstream smelters consume their inventories, SMM expects concentrated stockpiling by downstream players after the Chinese New Year. Regarding market transactions: Negotiations between upstream and downstream players were relatively active this month, with market sentiment showing a significant improvement compared to the previous week. In January, mainstream transaction premiums for medium- to high-grade nickel ore in Indonesia were concentrated at $15-17, rising to $17-18 in early February, with some transactions exceeding $20 premiums. SMM expects Indonesian nickel ore prices to fluctuate upward in the future.

Nickel Sulphate:

This week, prices for 5-series consumer-grade, 6-series consumer-grade, and 8-series power-grade ternary cathode precursors remained stable. In terms of raw material costs, prices for nickel sulphate, cobalt sulphate, and manganese sulphate also remained stable, keeping ternary cathode precursor prices steady. Demand side, due to the off-season and fewer calendar days, production plans at material plants declined, leading to overall weak demand for ternary cathode precursors. Supply side, operating rates at precursor plants were relatively low after resuming work post-Chinese New Year, with market transactions sluggish this week. Some precursor plants have already signed long-term contracts for this year, but others have yet to reach agreements due to losses, with negotiations between buyers and sellers still ongoing. Looking ahead to next week, considering the sentiment to stand firm on quotes among precursor plants facing losses and the expected rise in nickel salt prices, precursor prices are expected to increase to varying degrees.

NPI:

February 13 News: SMM 8-12% high-grade NPI average price was 960.5 yuan/mtu (ex-factory, tax included), up 4 yuan/mtu compared to the previous working day. Supply side, domestically, Philippine nickel ore prices remained largely 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, the stainless steel market has not fully recovered after the Chinese New Year holiday, with poor stainless steel shipments and weak raw material procurement sentiment among steel mills. Some traders hold strong expectations for the market, with active inquiries and heated market sentiment. Given the tightening trend in available market resources, high-grade NPI prices are expected to fluctuate upward in the short term.

Stainless Steel:

February 13, the stainless steel electronic trading platform updated to the May contract, showing a slight upward trend, while spot prices remained stable. Post-Chinese New Year, social inventory stabilized this week, with a slight inventory buildup compared to last week. This was mainly due to continuous shipments from steel mills after the holiday, coupled with weak market demand and slow inventory digestion, resulting in inventory accumulation. 304 cold-rolled stainless steel in Wuxi was quoted at 12,950-13,350 yuan/mt, 304 HRC at 12,450-12,600 yuan/mt, 316L cold-rolled at 23,800-24,200 yuan/mt, 201J1 cold-rolled at 7,700-7,800 yuan/mt, and 430 cold-rolled at 7,300-7,450 yuan/mt. At 10:30 a.m., the SHFE SS2503 contract price was 13,100 yuan/mt, with Wuxi stainless steel spot premiums at 20-420 yuan/mt (spot trimmed edge = raw edge + 170 yuan/mt).