Boosted by Favourable Macro News, Jinchuan Nickel Prices Rise [SMM Nickel Morning Meeting Summary]

3.6Nickel Morning Meeting Summary

Refined Nickel:

SMM March 5 News:Spot Premiums/Discounts: The mainstream spot premium quotation range for Jinchuan No. 1 nickel was 1,500-1,700 yuan/mt, with an average premium of 1,600 yuan/mt, up by 50 yuan compared to the previous trading day. The premium/discount quotation range for Russian nickel was -100 to 0 yuan/mt, with an average discount of -50 yuan/mt, also up by 50 yuan compared to the previous trading day.

Futures: Today, nickel prices fluctuated considerably but remained on an upward trend. As of the 11:30 closing price, it stood at 127,850 yuan/mt, up 0.11% from the previous trading day's settlement price, with a high of 128,310 yuan/mt.

Spot Premiums/Discounts: The premium for Jinchuan brand nickel rose by 50 yuan compared to the previous trading day, mainly driven by favorable macro news.

From a technical and market sentiment perspective, the SHFE nickel 2504 contract showed considerable fluctuations after opening. Despite being during the Two Sessions, market trading remained sluggish by midday, with participants generally adopting a wait-and-see approach, awaiting the latest updates from the Two Sessions. In the short term, a tug-of-war has formed between favorable macro factors and persistently bearish fundamentals.

Nickel Sulphate Price Spread: Today, nickel briquette prices ranged from 126,800-127,200 yuan/mt, with an average price of 127,000 yuan/mt, up by 300 yuan/mt compared to the previous trading day's spot price. Nickel sulphate remains at a discount to refined nickel.

Nickel Sulphate:

March 5, the SMM battery-grade nickel sulphate index price was 26,854 yuan/mt, with a quotation range of 26,760-27,480 yuan/mt, and the average price increased compared to the previous day.

On the cost side, recent LME nickel prices rose to $15,925. Meanwhile, the decision by Congo to suspend cobalt exports led to a significant increase in cobalt prices, further pushing up the MHP cobalt coefficient. Additionally, MHP sellers showed strong sentiment to stand firm on quotes, with the MHP coefficient continuing to rise, and some traders have stopped quoting. The cost of nickel sulphate is expected to continue rising.On the demand side, last week, due to the significant increase in cobalt sulphate prices, precursor plants suspended quotations for precursors, leading to cautious raw material procurement. This slowed the procurement pace of precursor plants during traditional procurement periods, despite the current high inventory demand.

From a supply perspective, rising raw material procurement prices have strengthened the sentiment to stand firm on quotes among nickel salt producers. In summary, considering the existing demand in the market and the cost-driven sentiment to stand firm on quotes among nickel salt smelters, nickel salt prices are expected to rise further in the short term.

Nickel Pig Iron (NPI):

March 5 News, the SMM 8-12% high-grade NPI average price was 987 yuan/mtu (ex-factory, tax included), up by 2 yuan/mtu compared to the previous working day.Supply side: Domestically, domestic smelters remain in a loss-making phase, with some undergoing maintenance, and overall production is expected to operate at low levels. In Indonesia, current Indonesian ore shipments fell short of expectations, coupled with production load adjustments in some major production areas. However, driven by ramp-ups in new capacity, production is expected to see a slight increase.

Demand side: The upward momentum in stainless steel spot prices is weak, but as stainless steel mills gradually resume operations after the holiday, production is expected to increase, leading to optimistic demand for high-grade NPI. Comparing raw material economics, the recent rise in stainless steel scrap prices has weakened the economic competition with high-grade NPI. Today, stainless steel mills were active in procurement, with transaction prices hitting new highs. In the short term, high-grade NPI prices are expected to remain relatively stable with a strong trend.

Stainless Steel:March 5 News, according to SMM, the stainless steel market continued to show sluggish trading this week.

Futures: The most-traded stainless steel futures contract SS2505 initially declined from a high level before rebounding. As of 10:30 on March 5, the SS2505 most-traded contract was quoted at 13,225 yuan/mt. Meanwhile, the 304/2B spot premiums/discounts fluctuated significantly, with the stainless steel spot premium range in Wuxi at -55 to 245 yuan/mt.

In the spot market, despite high enthusiasm for quoting and a flood of offers, actual transactions were extremely rare. Some steel mills continued to raise offer prices, drawing widespread attention in the market, akin to a stone causing ripples in a calm lake. However, most other producers adopted a cautious stance, refraining from following the price hikes and instead choosing to observe market dynamics.

From a regional price perspective, prices in major stainless steel trading markets such as Wuxi and Foshan remained relatively stable within a narrow range. However, small-batch transaction prices showed slight fluctuations. Overall, shipment levels fell far short of expectations, clearly indicating that the release of current market demand faced certain obstacles, and market vitality still requires time and more positive factors to be stimulated.

Cost reductions may result from lower raw material prices, improved production processes, or economies of scale. Meanwhile, price declines are primarily due to relatively ample market supply and persistently weak demand, with downstream industries such as construction and home appliances showing low purchase willingness, intensifying market competition and making price increases difficult.

Nickel Ore:

During the week, FOB prices for medium- to high-grade nickel ore from the Philippines pulled back after rising. In the low-nickel high-iron market, the rainy season in the Philippines is nearing its end, and mines are gradually offering quotations for March shipments. Current FOB transaction prices have eased compared to pre-rainy season levels.For medium- to high-grade nickel ore, Philippine mines still show sentiment to stand firm on quotes due to rising Indonesian ore prices. However, domestic NPI plants have limited acceptance of high-priced nickel ore. During the week, tender prices for medium-grade nickel ore from the Philippines were slightly lowered.Supply side: The rainy season in major southern mining areas is gradually ending, and subsequent shipments from the Philippines are expected to increase.Demand side: The continued rise in downstream NPI prices has brought some profit recovery, but NPI plants are still experiencing losses, limiting their acceptance of high-priced nickel ore. Currently, just-in-time procurement remains the primary approach. Port inventory: Port nickel ore inventory continues to decline.Ocean Freight: With the end of the rainy season in major southern mining areas, the shift in shipment locations may lead to an increase in ocean freight rates.In summary, influenced by multiple factors, Philippine nickel ore prices may pull back after previous highs and fluctuate downward.Current Market Transaction Prices: For pyrometallurgical ore, the Indonesian domestic ore premium of $18-19 from February continued this week. As March approaches, mainstream premiums for Indonesian nickel ore may rise again. The procurement intention price for March in the Dake Island industrial park is tentatively set at above $19-20, but most mid-tier pyrometallurgical smelters have not yet reached safe raw material inventory levels, showing some acceptance of premiums above $20.

For hydrometallurgical ore: Mines, under limited quotas, prefer to prioritize selling more profitable pyrometallurgical ore, actively reducing hydrometallurgical ore sales. Coupled with strong production expectations for numerous hydrometallurgical projects this year and next, demand for hydrometallurgical ore is expected to grow rapidly and continuously. In the medium and long term, hydrometallurgical ore prices may rise faster than pyrometallurgical ore.Supply side: This week, mine shipment conditions remained largely unchanged. Mines approved through the SIMBARA system showed relatively strong willingness to ship before Eid al-Fitr. Starting in March, as the rainy season in Sulawesi gradually ends and ports reopen, subsequent shipments are expected to increase.Demand side: Mid-tier smelters are making just-in-time procurement in March. Coupled with profit recovery driven by the continued rise in downstream NPI prices, demand support remains.Additionally, on February 17, Indonesian President Prabowo issued Presidential Decree No. 8 of 2025, announcing the natural resource export foreign exchange control policy (DHESDA). Although this policy does not directly affect nickel product exports, it has caused some disturbance to market sentiment.In summary, the March HPM benchmark price remains stable. While upstream shipments are expected to increase and demand persists, the overall tight supply rhythm of nickel ore may lead to an upward trend in Indonesian nickel ore absolute prices. However, the pace of increase may slow. Moving forward, attention should be paid to the specific changes in nickel ore market circulation brought about by the end of the rainy season in Sulawesi.