【SMM MHP Daily Review】April 28: MHP Prices in Indonesia Remain Stable

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Recently, influenced by the rebound in futures prices and the MHP coefficient fluctuating at highs. As of now, the MHP coefficient (relative to the SMM battery-grade nickel sulphate index) stands at 84%-85%, with the FOB price of Indonesian MHP at $12,634/mt (Ni contained).

Demand side, given the MHP coefficient remains high with no downward trend, nickel salt producers remain cautious about Q3 MHP procurement due to cost concerns. Supply side, recent flood disasters have constrained Indonesian MHP production, with significant impacts expected in April. Cost side, Indonesia's newly implemented PNBP royalty policy is tentatively scheduled to take effect on the 26th, which will directly increase nickel ore sales costs. Market feedback indicates that the resulting price hike for hydrometallurgical nickel ore procurement was already reflected in early April. Moreover, the royalty rate for hydrometallurgical ore itself is relatively low. For nickel ore with a 1.3 grade, the additional payment required is approximately $0.75/wmt compared to pre-PNBP revision levels. Thus, the PNBP policy is expected to have a relatively limited short-term impact on MHP production costs.

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