Nickel prices fell significantly in the early period due to the reciprocal tariff policy, and spot cargo transactions of refined nickel remained at a low level [[SMM Nickel Morning Meeting Summary]]

4.28 Nickel Morning Meeting Summary

Refined Nickel:

Last week, nickel prices continued the fluctuating trend seen since mid-April. The average price of SMM 1# refined nickel was 126,850 yuan/mt last week, up slightly by 0.5% WoW. LME nickel futures prices fluctuated rangebound around $15,600-15,800/mt. Expectations for US Fed interest rate hikes in June intensified, putting pressure on LME nickel prices denominated in US dollars. Risk aversion sentiment among investors was pronounced, and the tug-of-war between longs and shorts in the market intensified. In terms of supply, the Indonesian president signed a policy to increase nickel ore royalties, which will take effect on April 26. Local nickel ore prices are relatively high, and rising costs have provided some support to nickel prices. The operating rate of domestic refined nickel smelters remains high. On the demand side, downstream alloy demand was weak last week, mainly due to the significant decline in nickel prices earlier caused by the reciprocal tariff policy. Most enterprises had stockpiled in advance, resulting in low spot transaction volumes of refined nickel at month-end.

Nickel Sulphate:

Last week, the SMM battery-grade nickel sulphate index price was 27,813 yuan/mt. The quotation range for battery-grade nickel sulphate was 27,820-28,340 yuan/mt, with the average price increasing WoW. From a cost perspective, the nickel coefficient in MHP remained at highs last week, providing strong cost support for nickel salt smelters. On the supply side, prices quoted by manufacturers producing nickel sulphate from primary materials were relatively firm last week. Prices quoted by manufacturers producing nickel sulphate from recycled materials also increased, and there were no extreme low-price offers for nickel sulphate in the market. On the demand side, last week was a traditional procurement period for nickel salts in May. The procurement sentiment of precursor plants for nickel sulphate increased, and inquiry and transaction activity improved. Looking ahead, based on fundamental factors such as tight raw material supply, stable cost support, and downstream demand dependence, nickel salt prices are expected to show a mild upward trend in the short term.

NPI:

The average price of SMM 8-12% high-grade NPI was 974.7 yuan/mtu (ex-factory, tax included) last week, down 14.2 yuan/mtu from the previous week's average. The Indonesian FOB price was $116.6/mtu, down $1.77/mtu WoW. The price center of high-grade NPI shifted further downward this week. In terms of supply, domestically, smelters' sentiment towards raw material procurement was weak amid falling finished product prices, and with production drivers weakening, there are expectations of a short-term decline in production. In Indonesia, the overall production rhythm in the main producing areas was relatively stable, but the decline in medium-to-high grade ores led to a decrease in metal content. Some production lines with higher costs may see a decline in operating rates as profit losses expand. It is expected that Indonesian production may experience a slight decline. On the demand side, the transaction atmosphere in the downstream stainless steel market was sluggish. Under the influence of Trump's "reciprocal tariff" policy, market expectations for stainless steel prices in the future were weak. Steel mills mainly made just-in-time procurement of raw materials. Transaction prices in the market hit new lows consecutively during the week. It is expected that the negative feedback impact from stainless steel may continue in the short term, putting pressure on high-grade NPI prices.

Stainless Steel:

The overall performance of the stainless steel spot market was weak last week, with the price center pulling back. Despite the approaching Labour Day holiday, the anticipated pre-holiday stockpiling demand did not materialize as expected. Downstream buyers maintained a cautious wait-and-see attitude, with transactions mainly concentrated on low-priced warrant cargoes. The overall trading atmosphere was sluggish, and market activity was low. In the futures market, the most-traded 2506 contract showed a fluctuating trend, closing at 12,670 yuan/mt on Friday, down 75 yuan/mt from the previous trading day. In the spot market, the average prices of cold-rolled 304/2B coils in Wuxi and Foshan were 13,000 yuan/mt and 13,050 yuan/mt, respectively. Social inventory of stainless steel declined significantly, but sustained weak market demand made it difficult for prices to rebound. In addition, Tsingshan Group comprehensively lowered its plate prices, further driving market prices down. Currently, stainless steel prices have fallen to low levels, with a severe inversion between costs and selling prices. It is expected that stainless steel prices will continue to show a weak trend in the short term.

Nickel Ore:

Last week, FOB prices of Philippine nickel ore increased, while CIF prices held steady with a slight increase. From a supply and demand perspective, the rainy season in southern Philippines has basically ended, and shipments of medium-grade nickel ore from mines in the Surigao region are expected to increase. On the demand side, domestic NPI prices continued to fall during the week, and domestic smelters' acceptance of high-priced nickel ore declined. From an inventory perspective, domestic nickel iron plant inventories remain at relatively low levels, and there is still demand for just-in-time procurement, but the acceptance of nickel ore prices is limited. In terms of costs, the transaction prices of Philippine 1.3% nickel ore were mostly above FOB $35/wmt during the week, and nickel ore import costs increased again. Overall, there is an imbalance between the current high-price offers from the Philippines and the declining acceptance of high-priced nickel ore by domestic NPI enterprises, putting NPI plants in a dilemma when procuring raw materials. In terms of ocean freight rates, they held steady with a slight increase during the week, with rates from the Surigao region to Lianyungang, China, at approximately $10.5-11/wmt. Regarding exports from the Philippines to Indonesia, the volume continues to increase. Indonesian nickel ore prices have held steady and strengthened overall this month, providing some support to Philippine nickel ore prices. Overall, SMM expects that Philippine nickel ore prices may strengthen in the future.

Indonesian ore prices held steady overall last week. In terms of ore used for pyrometallurgy, upstream and downstream parties are negotiating premiums for May, with transaction prices temporarily holding steady. Last week's transaction prices in the Indonesian market: For ore used for pyrometallurgy, the mainstream premium in Sulawesi continued at $24-26. The delivery-to-factory price of SMM Indonesia's local 1.6% ore was $51.5-53.5/wmt. Prices for ore used for hydrometallurgy showed slight easing, with the delivery-to-factory price of SMM Indonesia's local 1.2% ore at $23.5-24.5/wmt.

Ore used for pyrometallurgy: On the supply side, the rainy season in the Sulawesi region has lasted longer, with frequent precipitation during the week, resulting in a slow recovery of nickel ore supply in Sulawesi. On the demand side, downstream NPI enterprises still have demand for just-in-time procurement. Additionally, raw material stocking by smelters in Q1 was not smooth, and the tight supply of nickel ore continues. In terms of policies, the nickel royalties under the PNBP policy have increased and officially took effect on April 26, raising the sales costs of nickel ore. Overall, prices for ore used for pyrometallurgy may hold steady and strengthen.

Ore used for hydrometallurgy: On the supply side, the tight supply situation of ore used for hydrometallurgy was not obvious during the week. On the demand side, the accident at the HPAL smelting project in the Sulawesi (Tsingshan) Industrial Park affected the demand for ore used for hydrometallurgy by HPAL smelters in April. Overall, prices for ore used for hydrometallurgy may weaken in the future, possibly experiencing a slight decline.