Refined Nickel Premiums and Discounts Both Decline, Prices Fluctuate Upward [SMM Nickel Morning Meeting Summary]

2.21Morning Meeting Notes

Refined Nickel:

SMM February 20 News: Spot Premiums/Discounts: The mainstream spot premium quotation range for Jinchuan No. 1 nickel was 1,900-2,100 yuan/mt, with an average premium of 2,000 yuan/mt, down 50 yuan from the previous trading day. The premium/discount quotation range for Russian nickel was -100 to 0 yuan/mt, with an average discount of 50 yuan/mt, down 50 yuan from the previous trading day. Futures: Nickel prices opened slightly lower today, rebounded, and then surged rapidly, fluctuating upward by 0.49%, with a low of 124,700 yuan/mt. Regarding spot premiums/discounts: Jinchuan brand nickel continued to decline by 50 yuan compared to yesterday, as downstream demand recovery remained below expectations and even weaker than the same period last year. From a technical perspective, the SHFE nickel 2503 contract opened lower in the morning and showed a trend of low opening and high closing, with the futures market gradually recovering and rebounding, but overall maintaining a rangebound trend. Although prices pulled back to the bottom of the fluctuation range since November yesterday, there is still some technical support below. Market sentiment remained cautious. Regarding the price spread with nickel sulphate: Today, nickel briquette prices were 123,450-123,800 yuan/mt, with an average price of 123,625 yuan/mt, up 100 yuan/mt from the previous trading day's spot price. Nickel sulphate remained at a discount to refined nickel.

Nickel Ore:

Supply side, Indonesia has approved 207 RKABs, with APNI data indicating that the approved RKAB quota for 2025 is 298 million wmt. In January, most mines passed the SIMBARA system review, and shipments proceeded normally. Demand side, the issuance of temporary quotas in Q4 2024 and the reduction in premiums left downstream smelters with about one month of raw material inventory. From a supply and demand perspective, domestic trade nickel ore supply in Indonesia is relatively ample, with increased market circulation. Compared to the same period at the beginning of last year, the supply looseness is relatively evident. However, as downstream smelters consume their inventories, SMM expects concentrated restocking by downstream players after the Chinese New Year. Regarding market transactions: Negotiations between upstream and downstream were relatively active this month, with market sentiment significantly improving compared to the previous week. In January, mainstream transaction premiums for medium- and high-grade nickel ore in Indonesia 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:

On February 20, the SMM battery-grade nickel sulphate index price was 26,588 yuan/mt, with a quotation range of 26,400-27,060 yuan/mt, and the average price remained flat compared to yesterday. On the cost side, LME nickel prices rose slightly today. On the demand side, precursor plants have mostly completed restocking, though some companies still have restocking needs for February. On the supply side, some nickel salt smelters have not yet resumed production, and current smelter quotations remained basically flat compared to last week, with spot order transactions relatively sluggish. Comprehensive analysis suggests that, considering the traditional procurement period has not yet arrived, market activity remains relatively low, and prices are expected to remain stable this week.

Nickel Pig Iron (NPI):

On February 20, the SMM 8-12% high-grade NPI average price was 971 yuan/mtu (ex-factory, tax included), up 3.5 yuan/mtu from the previous working day. Supply side, domestically, Philippine nickel ore prices are expected to rise, pushing up costs for domestic smelters, which face the risk of expanding losses, with production schedules expected to operate at low levels. In Indonesia, a major production area adjusted its production pace to reduce operating loads, and high-grade nickel ore resources are currently tight, with declining grades in major production areas. Metal content is expected to decrease. Demand side, stainless steel spot prices remained stable, with sluggish market transactions. Stainless steel mills, having previously restocked inventories and benefited from improved stainless steel scrap economics, showed weaker demand for high-grade NPI. In the short term, the high-grade NPI market sentiment is expected to pull back, but prices are likely to remain relatively stable with a strong trend due to cost support and tight circulating resources.

Stainless Steel:

On February 20, the stainless steel electronic SS05 contract was relatively active, with intense tug-of-war between longs and shorts. The SS05 contract price fluctuated upward, showing an overall fluctuating upward trend, though the subsequent trend remains influenced by multiple factors. This week, the spot market saw no significant increase in downstream demand, with sufficient supply and stable prices.

Today, 304 cold-rolled prices in Wuxi were 12,950-13,350 yuan/mt, 304 hot-rolled prices were 12,450-12,600 yuan/mt, 316L cold-rolled prices were 23,800-24,200 yuan/mt, 201J1 cold-rolled prices were 7,700-7,800 yuan/mt, and 430 cold-rolled prices were 7,300-7,450 yuan/mt. At 10:30, the SHFE SS2505 contract price was 13,185 yuan/mt, and Wuxi stainless steel spot premiums ranged from -65 to 285 yuan/mt (spot trimmed edge = mill edge + 170 yuan/mt).

Today's Wuxi stainless steel market price information is as follows: 304 cold-rolled prices were 12,950-13,350 yuan/mt; 304 hot-rolled prices were 12,450-12,600 yuan/mt; 316L cold-rolled prices were 23,800-24,200 yuan/mt; 201J1 cold-rolled prices were 7,700-7,800 yuan/mt; 430 cold-rolled prices were 7,300-7,450 yuan/mt.

As of 10:30, the SHFE SS2505 contract price was 13,185 yuan/mt. Wuxi stainless steel spot premiums ranged from -65 to 285 yuan/mt. Note: Spot trimmed edge price = mill edge price + 170 yuan/mt.