Refined Nickel Premiums Rise, Prices Open Higher and Move Upward [SMM Nickel Morning Brief]

2.25Morning Meeting Summary

Refined Nickel:

SMM February 24 News: Spot Premiums: The mainstream spot premium quotation range for Jinchuan No. 1 nickel was 1,900-2,000 yuan/mt, with an average premium of 1,950 yuan/mt, up 100 yuan from the previous trading day. The premium/discount quotation range for Russian nickel was -100 to 100 yuan/mt, remaining on par with the previous trading day. Futures Market: Nickel prices rose after opening today, up 0.06%, reaching a high of 125,350 yuan/mt. Regarding spot premiums: Jinchuan brand nickel increased by 100 yuan compared to the previous trading day, mainly due to sentiment from Europe and the US last week driving futures prices higher. However, the sentiment-driven impact has subsided today. From a technical and market sentiment perspective, the SHFE nickel 2503 contract opened higher in the morning, with an overall positive market atmosphere. Downstream demand is expected to recover after the Two Sessions. Regarding the price spread with nickel sulphate: Today, nickel briquette prices were 124,000-124,300 yuan/mt, with an average price of 124,150 yuan/mt, down 550 yuan/mt from the previous day's spot price. Nickel sulphate remains 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 SIMBARA system reviews, and shipments proceeded normally. Demand side, the issuance of temporary quotas in Q4 2024 and reduced premiums left downstream smelters with about one month of raw material inventory. From a supply-demand perspective, domestic trade nickel ore supply in Indonesia is relatively ample, with increased market circulation. Compared to the same period early last year, the supply looseness is more pronounced. However, as downstream smelters consume inventory, SMM expects concentrated stockpiling after the Chinese New Year. Market transactions: Upstream and downstream negotiations were active this month, with market sentiment significantly improving compared to the previous week. In January, mainstream transaction premiums for medium- and high-grade Indonesian 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 24, 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 unchanged from the previous day.

Cost side, LME nickel prices showed a fluctuating trend today. Demand side, this week marks the traditional procurement period for nickel sulphate, and precursor plants have yet to complete nickel salt inventory for March, leading to ongoing inquiries this week. Supply side, nickel salt producers, supported by costs, have no room for price reductions, with quotations unchanged from last week. Comprehensive analysis suggests that with weak supply and demand, prices are expected to remain stable this week.

Nickel Pig Iron (NPI):

February 24 News: SMM 8-12% high-grade NPI average price was 974 yuan/mtu (ex-factory, tax included), up 1 yuan/mtu from the previous working day. Supply side, domestically, smelters remain in a loss-making phase, 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 saw slight declines, with sluggish market transactions. Stainless steel mills, having stocked up inventories earlier and with improved economics of stainless steel scrap, showed weakened demand for high-grade NPI. However, with cost support and tight spot circulation, prices are expected to remain relatively stable with a strong trend in the short term.

Stainless Steel:

February 24, the stainless steel market activity was moderate, but spot transactions were mediocre.

Futures Market: The SHFE stainless steel SS2505 most-traded contract showed significant price fluctuations at 10:30, quoted at 13,225 yuan/mt. In Wuxi, stainless steel spot premiums ranged from -55 to 245 yuan/mt. Note: Spot trimmed-edge price = rough-edge price + 170 yuan/mt. Recent trends indicate that since July 2024, futures prices have shown a fluctuating trend with significant market uncertainty. Recently, price volatility has intensified, and market sentiment has been sensitive. Spot Market: Stainless steel spot prices for different grades were as follows: 201/2B coil (Wuxi, Foshan) price range was 7,700-7,800 yuan/mt, with an average price of 7,750 yuan/mt, unchanged from the previous day. 304/2B coil (Wuxi, Foshan, and other regions) price range was 13,000-13,800 yuan/mt, with a nationwide average price of 13,170 yuan/mt, remaining stable. 316L/2B coil nationwide average price was 24,125 yuan/mt, and 430/2B coil nationwide average price was 7,400 yuan/mt, with no changes today.

304/2B Spot Premiums: High and low levels fluctuated frequently, reflecting complex interactions between the spot and futures markets. Currently, market inventory is high, supply is relatively ample, and demand recovery is slow, limiting upward momentum for spot prices and exerting pressure on the futures market.

Market Outlook: In the short term, the stainless steel market is likely to remain affected by supply-demand imbalances, with limited room for significant price increases. Raw material price fluctuations and the pace of downstream demand recovery will be key factors influencing market trends.