The price of nickel series has fallen to a relatively low level, and the downward space for stainless steel prices is limited. [SMM Nickel Morning Meeting Summary]

4.23 Nickel Morning Meeting Minutes

Refined Nickel:

SMM Nickel April 22 Report:

Spot Market: Today, the SMM 1# refined nickel price ranged from 125,300 to 128,100 yuan/mt, with an average price of 126,700 yuan/mt, down 200 yuan/mt from the previous trading day. The mainstream spot premium for Jinchuan No.1 nickel was quoted in the range of 2,100-2,400 yuan/mt, with an average premium of 2,250 yuan/mt, down 200 yuan/mt from the previous trading day. The premium/discount for Russian nickel was quoted in the range of 0-300 yuan/mt, with an average premium of 150 yuan/mt, unchanged from the previous trading day.

Futures Market: The most-traded SHFE nickel contract opened higher in the morning and maintained an upward trend until 11:30, closing at 125,850 yuan/mt, slightly down from the previous trading day's settlement price.

Nickel prices are supported by policy and macro sentiment in the short term, but in the medium and long term, they are constrained by high inventory and surplus pressure.

Nickel Sulphate:

On April 22, the SMM battery-grade nickel sulphate index price was 27,770 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,760-28,340 yuan/mt, and the average price remained stable compared to yesterday.

Cost side, LME nickel prices have rebounded significantly recently due to cost support and the fading of negative sentiment from US policies, driving the cost support range for nickel salt production higher. Under the effect of cost transmission, the production cost pressure for nickel salt smelters continues to rise. Supply side, the availability of nickel salt for sale by smelters this month is tightening, and the overall inventory level in the industry remains low. Affected by the MHP coefficient and its persistently high prices, smelters' sentiment to stand firm on quotes remains. Demand side, most precursor plants have completed raw material stocking for April, and with the arrival of the May procurement cycle, 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 22, the SMM 8-12% high-grade NPI average price was 976 yuan/mtu (ex-factory, tax included), down 7.5 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 Indonesia's local ore remains stable, and smelter cost lines are generally stable with a slight rise, but the decline in spot prices has breached 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. In the short term, downstream stainless steel mills have weak demand for raw material procurement, 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 22, SS futures prices showed a weak pullback trend. Recently, stainless steel prices have remained stable but lack upward momentum. Due to persistently weak downstream end-user procurement demand, market participants' confidence is significantly insufficient. Some traders, under transaction pressure, have chosen to offer discounts, leading to an overall decline in transaction price centers.

Futures side, the most-traded contract 2506 fluctuated. At 10:30 AM, SS2506 was quoted at 12,710 yuan/mt, down 50 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 510-660 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 13,125 yuan/mt, and in Foshan averaged 13,155 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, the potential impact of US tariff policies has not been fully released, and market expectations for future trends remain unclear. Affected by this, downstream companies generally maintain a cautious wait-and-see attitude, leading to persistently weak market transactions. The previous market optimism for a price rebound has gradually faded, and prices have gradually pulled back. Today, Tsingshan Group announced the May tender price for high-carbon ferrochrome, which exceeded market expectations. This situation has reduced the likelihood of significant production cuts by stainless steel mills. From the raw material side, nickel prices have fallen to relatively low levels, while chrome procurement prices have risen. Overall, the cost support for stainless steel remains. Based on the above factors, it is expected that stainless steel prices have limited downward space.

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 mines 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 pig iron plant inventories remain relatively low, and just-in-time procurement demand still exists, but acceptance of nickel ore prices is limited. In terms of ocean freight rates, rates remained stable during the week, with rates from Surigao to Lianyungang, China, at around $10-10.5/wmt. From the Philippines to Indonesia, 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 ore prices remained stable with a slight rise last week. Last week, nickel prices pulled back, and the expected implementation of the PNBP policy provided some macro support for prices. This week, transaction prices remained generally stable. In the Indonesian market, for pyrometallurgical ore, the mainstream premium continued at $24-26, with 1.6% delivery-to-factory prices at $51.5-53.5/wmt. For hydrometallurgical ore, Indonesia's local ore with 1.3% delivery-to-factory prices were around $25-26/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 have been 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 pig 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 Indonesian pyrometallurgical ore may continue to be tight. For hydrometallurgical ore: on the supply side, the tight supply of hydrometallurgical ore was not obvious during the week. On the demand side, the accident at the hydrometallurgical project in Sulawesi Park affected MHP demand in April. Overall, the supply in the hydrometallurgical ore market is relatively sufficient. On the policy side, the Indonesian PNBP policy 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 taken into account 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 positive and negative factors, but the main theme of tight supply remains. Future price trends will need to focus on the rainy season in Sulawesi and Maluku Islands in April. SMM expects that Indonesia's local nickel ore prices will remain stable with a slight rise in the short term.