Precursor Plant's February Production Schedule Reduced, Nickel Sulphate Demand Weakens [SMM Nickel Morning Meeting Summary]

2.10Nickel Morning Meeting Summary

Refined Nickel:

Last week, nickel prices overall fluctuated upward, with spot prices ranging between 123,200-130,100 yuan/mt, while SHFE nickel futures prices fluctuated between 122,650 yuan/mt and 127,650 yuan/mt. During the week, SHFE nickel continued its upward trend in the night session, rising significantly by 2,790 yuan to 126,010 yuan, an increase of 2.26%. At the start of the new year, base metals broadly rose, with downstream stainless steel showing strong performance. The rise in Indonesian nickel ore prices led to a significant increase in costs, coupled with the recovery of nickel prices after a previous deep decline, resulting in a substantial overall increase in nickel prices. On the news front, following the announcement of the Philippines' "mining ban," futures prices rose for two consecutive days. Meanwhile, Indonesia's Minister of Energy and Mineral Resources expects nickel ore production in 2025 to reach 220 million mt, lower than the previously announced RKAB approval volume of 298.49 million mt, leaving nickel ore supply still uncertain.

Nickel Sulphate:                      

Last week, the SMM battery-grade nickel sulphate index price was 26,596 yuan/mt, with the quotation range for battery-grade nickel sulphate at 26,400-27,080 yuan/mt, and the average price rising slightly compared to the previous day.

Last week, the supply and demand situation in the nickel salt market was relatively complex. On the demand side, due to weak orders and the Chinese New Year holiday, precursor plants reduced their February production schedules, leading to weaker demand for nickel sulphate. Although some precursor manufacturers had completed basic inventory restocking, there was still restocking demand, and post-holiday inquiry volumes increased compared to pre-holiday levels. On the supply side, nickel salt smelters also reduced production schedules, with some not yet fully resuming operations. Those that had resumed operations began quoting prices and negotiating deals. As nickel salt smelters were still experiencing losses, the industry generally maintained firm pricing without significant concessions.

In the short term, prices are expected to show a slight upward trend under the combined influence of cost support and the sentiment to stand firm on quotes from nickel salt smelters.

NPI:

Last week, the weekly average price of SMM 8-12% high-grade NPI was 944.2 yuan/mtu (ex-factory, tax included), up by 3.1 yuan/mtu WoW, while the Indonesian NPI FOB index increased by $0.5/mtu WoW. This week, high-grade NPI prices rebounded upward. On the supply side, domestically, smelters gradually resumed normal production after post-holiday maintenance, but the increase in production was limited due to fewer production days this month. In Indonesia, production declined due to fewer production days and adjustments in production schedules in some regions. On the demand side, stainless steel futures fluctuated upward after the holiday, but spot performance remained relatively stable. With a high proportion of long-term contracts, stainless steel mills showed low willingness for spot order purchases. Market sentiment for the future remained strong, with some traders stockpiling, pushing up market prices. In the short term, high-grade NPI prices are expected to remain relatively stable with a strong trend.

Stainless Steel:

Last week, the stainless steel futures market showed strong performance, with the most-traded SS2503 contract exhibiting a significant upward trend. The opening price on Wednesday was 13,330 yuan/mt, climbing to a two-month high of 13,475 yuan/mt on Thursday, and finally closing at 13,420 yuan/mt on Friday. From a macro perspective, although the latest executive order from the Trump administration imposed a 25% tariff on goods from Canada and Mexico and raised tariffs on Chinese goods to 10%, it has not yet had a significant negative impact on the stainless steel market. Further observation is needed to assess its subsequent effects.