4.22 Nickel Morning Meeting Minutes
Refined Nickel:
SMM Nickel April 21 Report:
Spot Market: Today, the SMM 1# refined nickel price ranged from 125,450 to 128,350 yuan/mt, with an average price of 126,900 yuan/mt, down 400 yuan/mt from the previous trading day. The mainstream spot premium for Jinchuan No.1 nickel was quoted in the range of 2,300 to 2,600 yuan/mt, with an average premium of 2,450 yuan/mt, up 100 yuan/mt from the previous trading day. The premium/discount for Russian nickel was quoted in the range of 0 to 300 yuan/mt, with an average premium of 150 yuan/mt, unchanged from the previous trading day.
Futures Market: Today, SHFE nickel futures showed a fluctuating consolidation trend. The most-traded contract 2505 closed at 125,930 yuan/mt, up 0.25%, with an intraday fluctuation range of 124,660 to 126,450 yuan/mt.
Nickel prices may maintain a sideways movement in the range of 120,000 to 128,000 yuan/mt in the short term, as the cost game from Indonesia's policy implementation and high inventory suppression create a tug-of-war between bulls and bears. Macro factors such as the US dollar trend, international trade situation, and global economic conditions also contribute to cautious market sentiment.
Nickel Sulphate:
On April 21, the SMM battery-grade nickel sulphate index price was 27,766 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,750 to 28,350 yuan/mt. The average price remained stable compared to yesterday.
Cost side, LME nickel prices have shown a significant rebound recently, driven by cost support and the fading of negative sentiment from US policies, which has strengthened the cost support range for nickel salt production. Under the cost transmission effect, the production cost pressure for nickel salt smelters continues to rise. Supply side, the availability of nickel salt for sale from smelters this month is tightening, with overall industry inventory levels remaining low. Affected by the persistently high MHP coefficient and its prices, smelters' sentiment to stand firm on quotes remains. Demand side, most precursor plants have completed raw material stocking for April, and with the May procurement cycle approaching, market inquiries have started to become active this week. Downstream companies' acceptance of nickel salt prices has slightly improved. Looking ahead, based on tight raw material supply, solid cost support, and sustained downstream demand, nickel salt prices are expected to show a mild upward trend in the short term.
Nickel Pig Iron:
On April 21, the SMM 8-12% high-grade NPI average price was 983.5 yuan/mtu (ex-factory, tax included), down 1.5 yuan/mtu from the previous working day. Supply side, domestically, smelter profits are beginning to tighten, and some high-cost smelters are experiencing deeper losses, with weak production driving low output. In Indonesia, the premium for local ore remains stable, and smelter cost lines are generally stable with a slight rise, but spot prices have fallen below the cost lines of some smelters, leading to weak production driving, similar to the domestic situation, with overall output remaining stable. Demand side, stainless steel spot prices are at low levels in recent years, and the immediate raw material costs are high, leading to losses. Short-term raw material procurement demand from downstream stainless steel mills is weak, and the market transaction center continues to decline. It is expected that high-grade NPI prices will remain under pressure in the short term.
Stainless Steel:
On April 21, SS futures prices showed a fluctuating trend. The adjustment of US tariff policies has significantly impacted export-oriented stainless steel companies, and the recent weakening of cost support for stainless steel has severely dampened market confidence. The expected pre-holiday stocking procurement for the Labour Day holiday did not materialize as expected, and market transactions remain weak.
Futures side, the most-traded contract 2506 fluctuated. At 10:30 AM, SS2506 was quoted at 12,760 yuan/mt, down 25 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 510 to 610 yuan/mt. In the spot market, cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 8,250 yuan/mt; cold-rolled cut edge 304/2B coils in Wuxi averaged 13,150 yuan/mt, and in Foshan averaged 13,175 yuan/mt; cold-rolled 316L/2B coils in Wuxi were quoted at 23,650 yuan/mt, and in Foshan at 23,800 yuan/mt; hot-rolled 316L/NO.1 coils in both regions were quoted at 22,900 yuan/mt; cold-rolled 430/2B coils in Wuxi and Foshan were both quoted at 7,500 yuan/mt.
Currently, although the impact of US tariff policies has not fully materialized, downstream end-user procurement attitudes are extremely cautious, and market transactions remain sluggish. Traders are choosing to offer discounts to ensure cash flow, and some low-priced sources from futures-spot arbitrage have entered the market, leading to frequent low-price transactions. However, as current stainless steel prices are already at relatively low levels, further declines face significant resistance. Overall, stainless steel prices are expected to remain generally stable in the short term.
Nickel Ore:
Last week, Philippine nickel ore prices remained stable. From a supply and demand perspective, the rainy season in southern Philippines has basically ended, and shipments of medium-grade nickel ore from Surigao are expected to increase. On the demand side, domestic NPI prices continued to decline during the week, and domestic smelters' acceptance of high-priced nickel ore has decreased. From an inventory perspective, domestic nickel iron plant inventories remain relatively low, and just-in-time procurement demand still exists, but acceptance of nickel ore prices is limited. Ocean freight rates remained generally stable during the week, with rates from Surigao to Lianyungang, China, at around $10 to $10.5/wmt. Exports from the Philippines to Indonesia are still increasing, and Indonesian nickel ore prices remained generally stable with a slight rise during the month, providing some support to Philippine nickel ore prices. Overall, SMM expects that due to increased supply and declining downstream NPI prices, Philippine nickel ore prices may trend weakly in the near future.
Indonesian nickel ore prices remained stable with a slight rise last week. Nickel prices saw a correction, and the expected implementation of the PNBP policy provided some macro support to prices. This week, transaction prices remained generally stable. In the Indonesian market, the mainstream premium for pyrometallurgical ore continued at $24 to $26, with 1.6% delivery-to-factory prices at $51.5 to $53.5/wmt. For hydrometallurgical ore, the 1.3% delivery-to-factory price for local ore was around $25 to $26/wmt.
From a supply and demand perspective, for pyrometallurgical ore: On the supply side, the rainy season in Sulawesi Island has lasted longer, with frequent rainfall during the week, affecting nickel ore mining and transportation. However, overall, rainfall in Indonesia is expected to gradually decrease from April, and nickel ore supply is expected to increase. On the demand side, downstream NPI prices were impacted by the decline in nickel prices due to Trump's tariff policies, with NPI prices falling significantly during the week, weakening support for nickel ore prices. However, the April premium has been set, and any further adjustments will need to wait for negotiations on the May premium at the end of April. From an inventory perspective, raw material inventories at Indonesian nickel iron smelters are generally low, and just-in-time restocking demand still exists. Combined with a slight increase in Indonesian NPI production during the month, demand support remains. Overall, SMM expects that the supply of pyrometallurgical ore in Indonesia may continue to be tight. For hydrometallurgical ore: On the supply side, the tight supply situation for hydrometallurgical ore was not obvious during the week. On the demand side, accidents at hydrometallurgical projects in Sulawesi Park affected MHP demand in April. Overall, the supply of hydrometallurgical ore is relatively sufficient. On the policy side, the PNBP policy in Indonesia was implemented this week, tentatively starting on the 26th. The increase in royalties has raised the sales cost of nickel ore, but the significant increase in premiums at the beginning of April has already factored in the impact of the PNBP policy. Looking ahead, this policy is unlikely to further drive up nickel ore prices.
Overall, the nickel ore market is currently mixed with both bullish and bearish factors, but the main theme remains tight supply. Future price trends will depend on the rainy season situation in Sulawesi and Maluku Islands in April. SMM expects that local nickel ore prices in Indonesia will remain stable with a slight rise in the short term.
