Congo Halts Cobalt Exports, Nickel Sulphate Costs Still Have Room to Rise [SMM Nickel Morning Meeting Summary]

March 12 Nickel Morning Meeting Summary

Refined Nickel:

SMM March 11 News: Spot Premiums/Discounts: The mainstream spot premium quotation range for Jinchuan No. 1 nickel was 1,200-1,400 yuan/mt, with an average premium of 1,300 yuan/mt, down 50 yuan/mt from the previous trading day. The premium/discount quotation range for Russian nickel was -200 to 0 yuan/mt, with an average discount of -100 yuan/mt, also down 50 yuan from the previous trading day.

Futures: Nickel prices rose after the opening today. As of the 11:30 closing price, it reached 132,100 yuan/mt, up 0.42% from the previous trading day's settlement price, with a high of 133,910 yuan/mt.

Spot Premiums/Discounts: Jinchuan brand nickel fell by 50 yuan compared to the previous trading day. Market sentiment remained high, but downstream buyers were still mainly on the sidelines. Traders continued to lower prices to promote transactions, but with limited success.

From a technical and market sentiment perspective, SHFE nickel futures contracts rebounded after an initial drop at the opening, indicating that market sentiment remains relatively optimistic. Coupled with the upward trend in LME nickel, short-term sentiment is expected to continue dominating market price movements.

Nickel Sulphate Price Spread: Today, nickel briquette prices were 130,500-131,600 yuan/mt, with an average price of 131,050 yuan/mt, down 200 yuan/mt from the previous trading day's spot price. Nickel sulphate remains at a discount to refined nickel.

Nickel Sulphate:

March 11, the SMM battery-grade nickel sulphate index price was 27,227 yuan/mt, with a quotation range of 27,180-27,880 yuan/mt, and the average price increased WoW.

On the cost side, recent LME nickel prices have continued to rise. Meanwhile, the decision by Congo to suspend cobalt exports has led to a significant increase in cobalt prices, further pushing up the MHP coefficient for cobalt. Additionally, MHP sellers showed strong sentiment to stand firm on quotes, with the MHP coefficient continuing to rise, and some traders have stopped quoting. The cost of nickel sulphate is expected to continue increasing. On the demand side, last week, due to the sharp rise in cobalt sulphate prices, precursor plants suspended quotations for precursors, leading to cautious procurement of raw materials. This slowed the procurement pace of precursor plants during traditional procurement periods, despite the current high inventory demand. From the supply side, rising raw material procurement prices have strengthened the sentiment of nickel salt producers to stand firm on quotes. In summary, considering the existing demand in the market and the cost-driven sentiment of nickel salt producers to stand firm on quotes, nickel salt prices are expected to rise further in the short term.

NPI:

SMM March 11 News:

      March 11 News, the SMM 8-12% high-grade NPI average price was 997.5 yuan/mtu (ex-factory, tax included), up 1 yuan/mtu from the previous working day. Supply side: Domestically, as the rainy season in the Philippines nears its end, nickel ore supply remains tight, and nickel ore prices are stable. Smelters have weak production incentives, and production remains at low levels. In Indonesia, some production lines in major production areas have not resumed operations, and nickel ore output has fallen short of expectations, keeping overall production stable. Demand side: Stainless steel production schedules are expected to maintain an upward trend. With rising stainless steel scrap prices, the cost-effectiveness of raw materials has weakened, but downstream demand for high-grade NPI remains optimistic. In the short term, strong cost support for high-grade NPI, combined with tightening supply and demand, is expected to keep prices relatively stable with a strong trend.

Stainless Steel:

March 11 News: According to SMM's in-depth survey, today's stainless steel market transaction prices rose compared to yesterday. In futures, the most-traded stainless steel futures contract SS2505 fluctuated upward. As of 10:30 on March 11, the most-traded stainless steel futures contract SS2505 was quoted at 13,465 yuan/mt, down 10 yuan. For 304/2B spot premiums/discounts, the stainless steel spot premium range in Wuxi was -125 to 155 yuan/mt.

Today, the stainless steel spot market showed firm pricing, with overall transaction prices moving upward. Steel mills and traders maintained firm attitudes in their quotations, though there was generally a 20-30 yuan negotiation range for various products. Regionally, the Foshan market saw a slight increase in 304 stainless steel prices, while in Wuxi, prices for 201 and 304 stainless steel also rose slightly. Despite the upward price trend, downstream purchasing enthusiasm remained low, and procurement actions were relatively slow.

Nickel Ore:

Last week, FOB prices for medium- to high-grade nickel ore from the Philippines pulled back after peaking. In the low-nickel high-iron market, as the rainy season in the Philippines ends, mines have gradually started offering for March shipments. Current FOB transaction prices have eased compared to pre-rainy season levels. For medium- to high-grade nickel ore, Indonesian ore price increases and rising NPI prices have supported the sentiment of Philippine mines to stand firm on quotes. However, domestic NPI plants have limited acceptance of high-priced nickel ore. Last week, tender prices for medium-grade nickel ore from the Philippines were slightly lowered. Supply side: The rainy season in southern major mining areas is gradually ending, and Philippine shipments are expected to increase. Demand side: The continuous rise in NPI prices has brought some profit recovery, but NPI plants are still experiencing losses, limiting their acceptance of high-priced nickel ore. Currently, restocking is mainly just-in-time. Port inventory: Port nickel ore inventory continues to decline. Ocean freight rates: Some ocean freight rates have reached $11/mt. As the rainy season ends in southern major mining areas, shifts in shipping origins may lead to higher ocean freight rates. In summary, due to multiple factors, Philippine nickel ore prices are expected to pull back after previous peaks, fluctuating downward.

Current market transaction prices: For pyrometallurgical ore, the mainstream premium price for Indonesian nickel ore in March on Sulawesi Island was $19-20/wmt. The SMM Indonesian domestic trade laterite nickel ore 1.2% (delivery-to-factory price) price range was $25.5-27.5/wmt, up $0.5/wmt WoW, up 1.8% MoM. The SMM Indonesian domestic trade laterite nickel ore 1.6% (delivery-to-factory price) price range was $46.5-51.5/wmt, up $0.4/wmt WoW, up 0.9% MoM. Pyrometallurgical ore continued its price increase trend, though the growth rate narrowed compared to February. Supply: The rainy season in Indonesia's Sulawesi main mining area is gradually ending in March, and Indonesian nickel ore supply is expected to increase. However, downstream smelters still have just-in-time procurement needs. Additionally, during Ramadan in March, supply may be affected around Eid al-Fitr. Demand side: Mid-sized smelters have just-in-time procurement needs this month, supporting demand. Inventory: Mid-sized pyrometallurgical enterprises generally maintain inventory levels of less than two months. March procurement and restocking sentiment remains high, boosting market transaction activity. For hydrometallurgical ore, the tight supply rhythm continues this year. Currently, hydrometallurgical ore delivered to factories on Sulawesi Island is priced at approximately $26/wmt. With the ramp-up and commissioning of MHP projects this year, downstream demand is expected to increase. However, due to limited quotas, mines prefer to prioritize higher-profit pyrometallurgical ore, actively reducing hydrometallurgical ore sales, leading to faster price increases for hydrometallurgical ore compared to pyrometallurgical ore. Future focus: The impact of the March HPM price, to be announced on the 15th, on Indonesian nickel ore prices, as well as the actual circulation of domestic trade ore after the rainy season ends. Additionally, the new policy issued by Indonesia's Ministry of Energy and Mineral Resources this week, which adjusts the HPM pricing method, has caused some market sentiment disturbances, though it does not directly affect nickel smelters. In summary, Indonesian domestic trade ore prices in March are expected to remain relatively stable with a strong trend. Upstream shipments are expected to increase, and demand remains, but the overall tight supply rhythm of nickel ore may limit the pace of price increases.