APNI Indicated Quota Reductions and HPM Formula Changes Next Year

Dalian iron ore futures continued to fluctuate with a firm tone today. The main contract, I2605, ultimately closed at 780, up 0.52% from the previous working day. Traders sold cargoes at prevailing market rates,

As of December 16, the operating rate of 50 electric furnace steel mills producing building materials nationwide stood at 39.82%, flat WoW; the capacity utilization rate was 41.83%, down 0.23% WoW; the daily average production of building materials was 93.2 kt, down 500 mt WoW.

Spot lithium carbonate prices showed a strong trend of "continuous one-sided rise" this week.

Nickel prices experienced significant volatility this week, showing a pattern of initial decline followed by a rebound. Early in the week, the third interest rate cut by the US Fed this year failed to provide effective support. High inventory and market pessimism drove nickel prices to break through support levels and hit a new low for the period. A strong rebound began on Wednesday. By the close on December 19, the most-traded SHFE nickel contract 2601 settled at 117,180 yuan/mt, surging 3,600 yuan/mt for the day and gaining 1.27% WoW. LME nickel prices moved in sync, hitting a weekly low of $14,235/mt early in the week before rebounding sharply, ending the week up 1.50%. In the spot market, the average price of SMM #1 refined nickel this week was 116,820 yuan/mt, up 1,900 yuan/mt WoW. The average premium for Jinchuan nickel this week was 6,100 yuan/mt, rising 1,400 yuan/mt WoW. Premiums and discounts for mainstream domestic brands of electrodeposited nickel ranged from -100 to 400 yuan/mt. Approaching year-end, downstream purchase willingness weakened, and persistently high spot premiums reduced traders' stockpiling willingness, resulting in sluggish spot market transactions.

This week, China's APT prices surged 85,000 yuan/ton to 640,000 yuan/ton, driven by supply tightness due to exhausted mining quotas and concentrated maintenance. The European market followed China’s rise on sentiment, but actual trading remained weak due to holiday-driven demand lull and smelting halts. Meanwhile, China’s tungsten powder export prices rose $21/kg, pressuring overseas hard alloy end-users. SMM views the rally as a short-term overheated reaction, with further focus needed on domestic policies and downstream price transmission.

Premiums in Tianjin gradually rose in December. How will premiums and discounts move going forward?