The market is experiencing a tight supply of nickel salts, and there is still upside room for nickel sulphate prices. [SMM Nickel Morning Meeting Minutes]

3.26 Nickel Morning Meeting Summary Refined Nickel: SMM March 25 news: Spot premiums/discounts: The mainstream spot premium quotation range for Jinchuan No.1 nickel was 1,700-2,000 yuan/mt, with an average premium of 1,850 yuan/mt, down 200 yuan/mt from the previous trading day. The premium/discount quotation range for Russian nickel was -100 to 100 yuan/mt, at parity, up 25 yuan from the previous trading day. Futures: Nickel prices fluctuated upward after opening today. As of 11:30, the closing price was 128,920 yuan/mt, down 0.36% from the previous trading day's settlement price, with the lowest touching 128,100 yuan/mt. In terms of spot premiums/discounts, Jinchuan brand nickel fell 200 yuan from the previous trading day. Today's futures market showed an upward trend, and traders chose to lower prices appropriately to promote transactions. From a technical perspective, SHFE nickel futures contracts are still dominated by a fluctuating trend, and the domestic market is still waiting for the specific details of Indonesia's policy implementation. In terms of the price spread with nickel sulphate: Today, SMM1# refined nickel prices were 128,600-131,100 yuan/mt, with an average price of 129,850 yuan/mt, down 200 yuan/mt from the previous trading day's spot price. The price spread range was about 1,850 yuan/mt (Ni contained), and nickel sulphate is still at a discount to refined nickel. Nickel Sulphate: On March 25, the SMM battery-grade nickel sulphate index price was 27,989 yuan/mt, and the quotation range for battery-grade nickel sulphate was 27,960-28,500 yuan/mt, with the average price slightly higher than yesterday. On the cost side, MHP market circulation remains tight, and most traders' inventories are nearing depletion. Recently, the MHP transaction coefficient has shown an upward trend, with no downward momentum in the short term. In terms of nickel sulphate auxiliary materials, the rise in sulphuric acid prices has driven up MHP costs. On the supply side, affected by the rise in MHP prices, some nickel salt smelters have limited acceptance and have not yet completed MHP stockpiling for Q2, with expectations of production cuts. Nickel salt smelter inventories remain at low levels, and the market circulation of nickel salts is significantly tight, resulting in strong sentiment among nickel salt smelters to stand firm on quotes. On the demand side, this week is a traditional procurement period, and precursor plants will focus on stockpiling, with increased acceptance of nickel sulphate prices. Some refined nickel plants also have demand for externally purchased nickel sulphate, further exacerbating the tight situation of nickel salts. Currently, buyers and sellers are still in a price game, and nickel sulphate prices are expected to have upside room in the short term. Nickel Pig Iron (NPI): SMM March 25 news: The average price of SMM 8-12% high-grade NPI was 1,024 yuan/mtu (ex-factory, tax included), up 1.5 yuan/mtu from the previous working day. On the supply side, domestically, smelter raw material inventories are running low, and shipments from the Philippines at the end of the rainy season still take time to reach China. Some smelter production lines are under maintenance, and production is running low. In Indonesia, nickel ore mining and output are below expectations, and some smelter raw material inventories are at low levels. Although new capacity is being released, the increase in production is relatively limited. On the demand side, stainless steel spot performance is relatively weak, and the price of stainless steel scrap has been lowered, restoring some economic advantages, putting pressure on high-grade NPI prices. However, from the perspective of cost and market circulation resources, high-grade NPI is expected to remain stable in the short term. Stainless Steel: SMM survey shows that on March 25, stainless steel market prices were generally stable. Quotations for all series products were stable, with some room for negotiation on actual orders, and the market trading atmosphere was quiet. The most-traded futures contract 2505 fluctuated rangebound. At 10:30 am, SS2505 was quoted at 13,335 yuan/mt, down 45 yuan/mt from the previous price, continuing the downward trend. The price fluctuated rangebound within the 13,340-13,380 yuan range throughout the day. In Wuxi, the spot premium/discount for 304/2B was in the 185-385 yuan/mt range. In today's stainless steel spot market, the price of cold-rolled 201/2B coil in Wuxi was 7,770 yuan/mt, and the average price in Foshan was 7,780 yuan/mt. The average price of cold-rolled trimmed 304/2B coil in Wuxi was 13,920 yuan/mt, and the average price in Foshan was 13,820 yuan/mt. In addition, prices for other 300 series and 400 series stainless steel products remained stable. From a market trend perspective, stainless steel market prices are expected to maintain a rangebound fluctuation in the short term, and the subsequent trend will depend on further downstream demand. Nickel Ore: Last week, prices for low-grade and high-grade nickel ore from the Philippines remained stable, while medium and high-grade Philippine ore prices saw a slight increase again, mainly due to two reasons: 1. As an exporter, Indonesia's nickel ore prices have risen and are still expected to rise, providing some support for Philippine nickel ore export prices. 2. From a supply and demand perspective, the Surigao region began to offer and ship this month, but supply recovery has been slow due to weather. On the demand side, domestic nickel pig iron plant inventories are mostly still at low levels, and there is strong demand for just-in-time procurement of raw materials. However, although the current rise in downstream high-grade NPI prices has brought some profit recovery, domestic iron plants are still in a loss-making situation and have limited ability to accept high-priced nickel ore. In terms of ocean freight rates, ocean freight rates rose again during the week due to the shift in shipping locations and bad weather, further increasing the cost of nickel ore imports. Overall, under the influence of a strong supply and weak demand pattern and policy-side disturbances, Philippine prices have risen. SMM expects that subsequent Philippine ore prices may remain stable with a strong trend. Last week's market transaction prices: For pyrometallurgical ore, SMM Indonesia's local ore with 1.6% grade had a weekly price of $49.5/wmt. For hydrometallurgical ore, SMM Indonesia's local ore with 1.2% grade had a weekly price of $26.5/wmt. The mainstream premium for pyrometallurgical Indonesian nickel ore in March remained stable at $19-21/wmt. The slight increase in CIF prices mainly came from the Indonesian Ministry of Energy and Mineral Resources' release of the benchmark price for the second half of March on the 15th, which was slightly higher than the previous period, with 1.2% grade ore up $0.26 and 1.6% grade ore up $0.46. From a supply perspective, this year's prolonged rainy season in Sulawesi has had a certain impact on nickel ore mining and transportation, and supply recovery in main mining areas such as Sulawesi has been slow. In addition, the end of March coincides with the Eid al-Fitr holiday, which has exacerbated the tight supply situation to some extent. From a demand perspective, Indonesian nickel pig iron smelting enterprises generally have low inventories and still have strong demand for just-in-time restocking, with high downstream procurement sentiment. SMM expects that nickel ore supply may continue to be tight. In terms of policy, last week the Indonesian Ministry of Energy and Mineral Resources signaled that the PNBP policy may be implemented before Eid al-Fitr. If the policy is implemented as scheduled, the sales cost of nickel ore mines will increase. Combined with the current rise in downstream NPI and MHP prices, from the current market situation, mines have strong bargaining power, and the cost increase brought by this policy to mines may be largely passed on to downstream enterprises, providing strong support for nickel ore prices. Overall, SMM expects that Indonesian local nickel ore prices may continue to rise.