Refined Nickel Premium Fluctuations; Macro Factors Stabilize Trading Sentiment [SMM Nickel Morning Brief]

February 11 Nickel Morning Meeting Summary

Refined Nickel:

SMM February 10: Spot Premiums/Discounts: The mainstream spot premium quotation range for Jinchuan Nickel No. 1 was 2,100-2,400 yuan/mt, with an average premium of 2,250 yuan/mt, down 300 yuan compared to the previous trading day. Russian nickel premiums/discounts were quoted in the range of -200 to 200 yuan/mt, with an average premium of 0 yuan/mt, up 50 yuan compared to the previous trading day. Futures: Nickel prices opened lower in the morning, with a decline of 0.27%, reaching a low of 126,320 yuan. Regarding spot premiums/discounts: Jinchuan brand nickel premiums slightly decreased WoW, likely due to the domestic refined nickel surplus and inventory buildup on LME nickel, despite the recent tight overseas nickel ore supply affecting prices. Spot premiums/discounts for other nickel plate brands in the spot market showed relatively small changes overall. Nickel prices fluctuated within a range today. Jinchuan brand nickel premiums showed slight loosening. Spot premiums/discounts for other nickel plate brands remained largely stable this month. Nickel prices fluctuated overall today, with macroeconomic uncertainties leading to cautious downstream procurement and a more cautious market sentiment. In the short term, nickel prices are expected to maintain a fluctuating trend within a range.

Regarding the Price Spread with Nickel Sulphate: Today, nickel briquette prices were 126,000-126,350 yuan/mt, with an average price of 126,175 yuan/mt, up 775 yuan/mt compared to the previous trading day's spot price. Nickel sulphate remains at a discount to refined nickel.

Nickel Ore:

Supply side, currently, Indonesia has approved 207 RKABs, with data from APNI indicating that the approved RKAB quota for 2025 is 298 million wmt. In January, most mines successfully passed SIMBARA system reviews, and shipments proceeded normally. Demand side, the issuance of temporary quotas in Q4 2024 and reduced premiums have left downstream smelters with about one month of raw material inventory. From a supply and demand perspective, domestic trade ore supply in Indonesia is relatively ample, with increased market circulation. Compared to the same period early last year, the supply looseness is relatively evident. However, as downstream smelter inventories are consumed, SMM expects concentrated stockpiling by downstream players after the Chinese New Year. Regarding market transactions: Upstream and downstream negotiations were relatively active during the month, with market sentiment showing significant improvement WoW. In January, mainstream transaction premiums for Indonesian medium- and high-grade nickel ore were concentrated at $15-17, rising to $17-18 in early February, with some transactions exceeding $20 premiums. SMM expects Indonesian nickel ore prices to fluctuate upward in the future.

Nickel Sulphate:

February 10, SMM battery-grade nickel sulphate index price was 26,598 yuan/mt, with a quotation range of 26,400-27,080 yuan/mt, and the average price remained unchanged WoW.

Cost side, LME nickel prices slightly pulled back today to $15,700, weakening cost support slightly. Demand side, some precursor plants have completed February inventory stockpiling, with some plants holding sufficient inventory to meet immediate needs, though procurement demand still exists. Supply side, some nickel salt smelters have not resumed operations, while others that have resumed are quoting and negotiating orders. Current smelter quotations are largely stable WoW, with spot order transactions sluggish. Comprehensive analysis suggests that sentiment to stand firm on quotes due to losses at smelters and existing procurement demand is expected to drive prices to rise slightly in the near term.

NPI:

February 10, SMM 8-12% high-grade NPI average price was 951 yuan/mtu (ex-factory, tax included), up 4 yuan/mtu compared to the previous working day. Supply side, domestically, Philippine nickel ore prices remained largely stable, while domestic smelters continued to operate at a loss, with production slightly recovering after seasonal maintenance. In Indonesia, overall production decreased in February, coupled with adjustments in production in certain major regions, leading to a slight decline in total output. Demand side, the stainless steel market has not fully recovered after the Chinese New Year holiday, with sluggish stainless steel shipments and weak raw material procurement sentiment from steel mills. Some traders hold strong expectations for the market, with active inquiries and vibrant market transaction sentiment. With tightening market circulation resources, high-grade NPI prices are expected to fluctuate upward in the short term.

Stainless Steel:

February 10, stainless steel electronic trading prices edged down slightly, while spot prices remained firm or even rose slightly. Upstream raw material prices provided significant support. Prices for NPI, high-carbon ferrochrome, and stainless steel scrap remained stable with slight increases. Market activity began to pick up today, with downstream traders resuming operations and market inventory starting to be digested. 304 cold-rolled prices in Wuxi were quoted at 13,050-13,400 yuan/mt, 304 HRC at 12,450-12,600 yuan/mt, 316L cold-rolled at 23,800-24,200 yuan/mt, 201J1 cold-rolled at 7,750-7,800 yuan/mt, and 430 cold-rolled at 7,200-7,450 yuan/mt. At 10:30 a.m., SHFE SS2503 contract price was 13,280 yuan/mt, with Wuxi stainless steel spot premiums/discounts at -60 to 290 yuan/mt (spot trimmed edge = mill edge + 170 yuan/mt).