Spot Market Transactions Remain Sluggish as Raw Material Stocking Is Basically Completed [SMM Nickel Morning Meeting Summary]

1.24Nickel Morning Briefing

Refined Nickel:

Spot Premiums/Discounts: Today, mainstream spot premiums for Jinchuan No. 1 nickel were quoted in the range of 1,900-2,100 yuan/mt, with an average premium of 2,000 yuan/mt, up by 100 yuan compared to yesterday. Russian nickel premiums/discounts were quoted in the range of -300 to 0 yuan/mt, with an average discount of -150 yuan/mt, down by 50 yuan compared to yesterday.

Futures: In the morning, nickel prices fell by 3,450 yuan to 124,200 yuan, a decrease of 2.7%.

Today, futures prices dropped significantly, with the most-traded contract closing at 124,200 yuan in the morning. On one hand, the approved 2025 nickel ore mining work plans and budgets (RKAB) total 298.49 million mt. Against the backdrop of oversupply, previous high nickel prices and a sharp increase in overseas nickel futures inventory, which exceeded 170,000 mt, triggered a significant decline in nickel prices. As the Chinese New Year approaches, upstream and downstream enterprises have entered shutdown and holiday modes, with stocking of NPI and nickel salts largely completed. The spot market remains relatively quiet, and overall market demand has slowed. Under the oversupply situation, Jinchuan brand premiums are expected to decline further in the short term.

Price Spread With Nickel Sulphate: Today, nickel briquette prices were 123,750-124,450 yuan/mt, down by 2,750 yuan/mt compared to the previous trading day's spot prices. Nickel sulphate remains at a discount to refined nickel.

Nickel Ore:

Philippine Laterite Nickel Ore:

On January 23, SMM Philippine laterite nickel ore prices for 0.9% grade were $36-37/wmt, prices remained stable; for 1.3% grade, prices were $38.5-40.5/wmt, with an average price of $39.5/wmt, prices remained stable; for 1.4% grade, prices were $43.5-48/wmt, with an average price of $45.75/wmt, prices remained stable; for 1.5% grade, prices were $51-53/wmt, with an average price of $52/wmt, prices remained stable.

Ocean Freight: SMM nickel ore ocean freight rates were $7-8/mt from the Philippines to Lianyungang and $8-9/mt from the Philippines to Tianjin Port. After last week's adjustments due to changes in shipping origins, freight rates remained unchanged today.

Spot Daily Review: Yesterday, domestic Philippine nickel ore prices remained stable. Following slight increases in transaction prices for Bunguet and Erman mines, prices for 1.3% and 1.4% Philippine laterite nickel ore stabilized after slight increases earlier in the week. Domestic traders and NPI plants have largely completed procurement before the holiday. Supply side: Major mining areas in the south remain in the rainy season, with limited supply and fewer tenders in the Philippine nickel ore market during the off-season. Demand side: Domestic NPI plants continue to face losses and focus on just-in-time procurement, but slight rebounds in NPI prices have provided some profit recovery. Looking ahead, Philippine laterite nickel ore prices are expected to remain stable with a slight upward trend.

Indonesian Domestic Ore Hot Topics:

Weekly Prices: Indonesian domestic trade laterite nickel ore (1.2% delivery-to-factory price) was $20.5-23.8/wmt, with an average price of $22.15/wmt, up by $0.15/wmt; for 1.6% grade, prices were $43.4-44.8/wmt, with an average price of $44.1/wmt, up by $0.1/wmt.

Supply side: APNI announced that the current approved RKAB quota for 2025 is 298 million wmt. Demand side: Indonesian pyrometallurgy enterprises are expected to start procuring nickel ore for February after the holiday. Additionally, due to inventory levels, local Indonesian smelters still have some just-in-time stocking demand. Coupled with market expectations for Indonesian policy uncertainties and a slight reduction in Indonesia's February HPM benchmark price, there is evident bargaining between upstream and downstream players. In summary, SMM expects premiums to rise slightly in February, but given the relatively ample supply after H1 quota approvals, the price increase for Indonesian domestic ore will be limited.

Nickel Sulphate:

On January 23, SMM battery-grade nickel sulphate index prices were 26,576 yuan/mt, with a quotation range of 26,380-27,040 yuan/mt, and the average price increased compared to yesterday.

Cost side: Today, LME nickel prices pulled back to $15,650, weakening cost support. Currently, profits for producing nickel sulphate from high-grade nickel matte and intermediate products have turned negative. Demand side: Most precursor plants have completed January nickel salt stocking, with only a small portion still requiring restocking. Some post-holiday orders have already been signed. However, the spot order market remains relatively inactive. Supply side: Spot nickel salt availability remains tight, with supply constraints. Overall, under the tight supply and cost inversion at salt plants, prices still have room to rise.

NPI:

On January 23, SMM 8-12% high-grade NPI average price was 942 yuan/mtu (ex-factory, tax included), up by 1 yuan/mtu compared to the previous working day. Supply side: Domestically, high-grade NPI prices fluctuated downward, with domestic smelters still operating at a loss, and production is expected to decline slightly. In Indonesia, with the release of some new capacity and additional output from high-grade nickel matte conversion, high-grade NPI production is expected to increase slightly. Demand side: As the stainless steel market approaches the Chinese New Year holiday, stainless steel spot prices remain stable. Top-tier enterprises have sufficiently stocked raw materials before the holiday, with only some small and medium-sized stainless steel mills making spot orders. High-grade NPI demand has not shown significant recovery. Cost support for high-grade NPI remains firm, and prices may still have room for recovery in the short term as the market approaches the holiday.

Stainless Steel:

On January 23, stainless steel electronic trading prices remained stable, and spot prices followed suit. The market is entering the final stages before the holiday, with most entities, except for some futures-spot combined operations and state-owned enterprises, already on spring holiday. Social inventory, except for the 400-series, saw slight inventory buildup due to pre-holiday arrivals and weak off-season demand. A stainless steel mill in North China is expected to resume 200-series production in March. 304 cold-rolled prices in Wuxi were 13,000-13,300 yuan/mt, 304 HRC prices in Wuxi were 12,400-12,600 yuan/mt, 316L cold-rolled prices in Wuxi were 23,600-23,800 yuan/mt, 201J1 cold-rolled prices in Wuxi were 7,600-7,750 yuan/mt, and 430 cold-rolled prices in Wuxi were 7,150-7,450 yuan/mt. At 10:30 AM, SHFE SS2503 contract prices were 13,050 yuan/mt, with Wuxi stainless steel spot premiums at 120-420 yuan/mt (spot trimmed edge = rough edge + 170 yuan/mt).