Recycling rates to be key factor for Platinum, Palladium

Taiwan (PoC)'s stainless steel midstream processor Sinkang Industries reported a blockbuster H1 2026: gross margin surged 10 percentage points YoY to 12%, driving after-tax net profit up more than 7x to NT$134 million (approximately USD4.2 million) with EPS of NT$1.02, a dramatic turnaround from near-breakeven in H1 2025. President Cheng Chu-Tzu attributed the profit jump primarily to nickel price strength on geopolitical tensions and Indonesia's production cut policies lifting stainless steel pricing. The product mix is highly concentrated, with 304-series accounting for 93% of revenue. While H1 revenue grew 9.5% YoY to NT$1.666 billion, momentum has already stalled entering H2: July revenue grew just 0.9% YoY and August turned negative at -5.3% YoY. Management characterized H2 as "stable" rather than "accelerating," with Cheng noting that raw material cost visibility is low as pricing power rests entirely with upstream mills including Tang Eng, Yusco, Walsin Lihwa, and Tung Mung. Whether the H1 gross margin peak can be sustained remains uncertain. The company flagged gradually declining inventory levels as a potential restocking catalyst, and identified semiconductor and electronics customer development as its medium-to-long-term growth axis.

[9.23 Morning Meeting Minutes] President Xi Jinping will pay a state visit to the US from September 23 to 25, marking the first state visit to the US in 11 years and the second exchange of visits between the Chinese and US heads of state within half a year. Earlier, He Lifeng completed economic and trade consultations with Bessent and Greer in New York, with officials describing the talks as "candid, in-depth, and constructive," and a dialogue on AI issues was also held. The central parity rate of the yuan rose for the ninth consecutive day, with the onshore yuan closing at 6.6955, the highest since July 2022. The outcome of the meeting has become the biggest variable for global markets this week. The most-traded SHFE nickel contract (2610) drifted higher in early trading, closing the morning session at 124,400 yuan/mt, up 0.70%. On the macro front, falling oil prices eased pressure from rate-hike trades, but US Fed officials continued to strike a hawkish tone, and expectations for an October rate hike remained. On the fundamental side, water resource disruptions in Indonesia continued to affect supply expectations, but nickel's own high inventory and weak demand pattern remained unchanged. In the short term, the most-traded SHFE nickel contract is expected to consolidate, with a projected range of 123,000-126,000 yuan/mt.

Indonesian nickel ore delivered to main Indonesian ports: 1.2% Ni: $26.5/wmt, down $0.5/wmt from the previous assessment. 1.4% Ni: $51.8/wmt, unchanged. 1.5% Ni: $58.5/wmt, unchanged. 1.6% Ni: $63.4/wmt, unchanged. Market update: Indonesia's nickel ore market remains focused on the gradual release of additional 2026 RKAB approvals. Some supplementary quotas have started entering the market, but the government has not announced a final national additional quota. Meanwhile, the revised HPM formula effective September 15 has lowered the benchmark for low-grade limonite, with 1.2% Ni HPM at $24.89/wmt, below current market prices.