Nickel Sulphate Supply Remains Tight, Salt Plant Finished Product Inventories Stay at Low Levels [SMM Nickel Morning Meeting Summary]

1.13Nickel Morning Briefing

Refined Nickel:

Last week, nickel prices overall fluctuated downward, with refined nickel prices showing some volatility during the week. From January 6 to 10, the mainstream spot premiums for Jinchuan No. 1 nickel gradually declined from 3,500-3,600 yuan/mt to 3,000-3,300 yuan/mt, with the average premium dropping from 3,550 yuan/mt to 3,150 yuan/mt. In the futures market, nickel prices rose by 600 yuan to 125,170 yuan in the morning, an increase of 0.48%, but market transactions remained sluggish. On the macro front, Indonesia's macro policies had some impact on nickel prices, with LME nickel prices rebounding to $15,500/mt (Ni contained), supporting stronger costs. Domestically, high-grade NPI prices fluctuated downward, and stainless steel mills entered a seasonal maintenance period, leading to reduced production and lower demand for NPI. Due to the rainy season, port arrivals of nickel ore from the Philippines were expected to show no growth, and port inventories continued to decline to 8.396 million wmt, equivalent to 65,930 mt in metal content. In the industry chain, nickel sulphate prices rose slightly, with the battery-grade nickel sulphate index price reaching 26,420 yuan/mt, as supply remained tight and finished product inventories at salt plants stayed low. On the supply and demand side, precursor plants had mostly completed January stocking, and market inquiry activity was relatively low. Overall, with a loose supply-demand balance, SHFE nickel prices are expected to continue fluctuating downward next week.

Nickel Sulphate:

Last week,the SMMbattery-grade nickel sulphate index price was26,420yuan/mt, with the quotation range for battery-grade nickel sulphate at26,050-26,950yuan/mt, and the average price rose slightly compared to the previous week. This week, although price fluctuations were minor, the overall trend showed steady growth.

The nickel salt market this week exhibited tight supply and relatively weak demand. On the demand side, most precursor plants had completed January stocking, with only a few enterprises still needing to restock, and market inquiry activity remained low. On the supply side, some manufacturers suspended shipments due to losses, and finished product inventories remained low, reducing market circulation and further exacerbating the tight supply situation.

Considering these factors, the nickel salt market saw slight price increases this week amid tight supply and stronger cost support. The tight supply pattern is expected to persist, and prices are likely to continue rising.

NPI:

Last week,the weeklySMM 8-12%high-grade NPI average price was934.3yuan/mtu (ex-factory, tax included), down2.1yuan/mtu WoW. The IndonesianNPI FOBindex fell$0.7/mtu WoW. This week, high-grade NPI prices continued to fluctuate downward. On the supply side, domestically, production in east and north China weakened slightly due to losses. In Indonesia, NPI production continued to rise due to the release of new capacity and the conversion of high-grade nickel matte to high-grade NPI. On the demand side, stainless steel mills entered a seasonal maintenance phase, weakening demand for high-grade NPI. Leading steel mills had sufficient long-term raw material stocking, and market transactions remained sluggish this week. Additionally, on the cost side, spot premiums for Indonesian laterite nickel ore remained stable, providing strong cost support for high-grade NPI, limiting its downside room in the short term.

Stainless Steel:

Last week,stainless steel spot prices stabilized from their downward trend under the influence of futures price increases. On January10,the SMMWuxi region304uncut edge cold-rolled coil quotation range was12,800-13,000yuan/mt, and the304hot-rolled coil quotation range was12,300-12,500yuan/mt. Steel mills in east and south China gradually implemented maintenance plans, with a short-process stainless steel mill in south China expected to suspend production for about1.5months, affecting total production by approximately120,000mt. This led to undersupply of 400-series stainless steel, with shortages in some specifications. Although production schedules for 200-series and 300-series stainless steel decreased, the market's inventory buildup was sufficient, gradually balancing supply and demand but still reflecting a supply-strong, demand-weak pattern. As the Chinese New Year holiday approached, overall operating rates and production schedules at stainless steel mills were expected to decline again, with total stainless steel production in January decreasing by8.53%MoM, including200-series down8.05%,300-series down8.98%, and400-series down7.9%. On the demand side, year-end off-season consumption deepened, with market shipments remaining low and downstream demand continuing to weaken. On the raw material side, prices for NPI, high-carbon ferrochrome, and stainless steel scrap continued to decline, with stainless steel scrap prices dropping by150yuan/mt, further weakening raw material support. Although stainless steel finished product spot prices remained low, the decline was not significant and even tended to stabilize, with profits across all series slowly recovering. The 400-series was particularly affected by the supply-weak, demand-strong market relationship. In the short term, stainless steel spot prices are expected to remain stable or rise slightly.