The Stainless Steel Market Exhibits Low Activity, While the Implementation of Indonesia's New Tax Policy Is Still Expected to Be High [SMM Nickel Morning Meeting Summary]

4.3 Nickel Morning Meeting Minutes Refined Nickel: SMM April 2nd News: Spot premiums/discounts: The mainstream spot premium quotation range for Jinchuan No.1 nickel was 1,700-1,800 yuan/mt, with an average premium of 1,750 yuan/mt, up 50 yuan/mt from the previous trading day. The premium/discount quotation range for Russian nickel was -100 to 300 yuan/mt, with an average premium of 100 yuan/mt, up 50 yuan/mt from the previous trading day. Futures side: Nickel prices fluctuated rangebound today. As of 11:30, the closing price was 129,530 yuan/mt, up 0.67% from the previous trading day's settlement price, with a high of 130,120 yuan/mt. In terms of spot premiums/discounts, Jinchuan brand nickel prices rose 50 yuan from the previous trading day. Recently, nickel prices have been fluctuating around 129,000 yuan, and traders have chosen to appropriately increase premiums to protect profits. From a macro perspective, although Indonesia's new tax policy has not been released as scheduled, market expectations for its implementation remain high, which provides some support for nickel price costs. Coupled with the still tight supply at the mine end, there is some room for nickel prices to rise in the short term. In terms of the price spread with nickel sulphate: Today, SMM1# refined nickel prices were 128,880-131,300 yuan/mt, with an average price of 130,050 yuan/mt, flat with the previous trading day's spot price. The price spread with nickel sulphate remains around 1,595 yuan/mt (Ni contained), with nickel sulphate still at a discount to refined nickel. Nickel Sulphate: On April 2nd, the SMM battery-grade nickel sulphate index price was 28,109 yuan/mt, and the quotation range for battery-grade nickel sulphate was 28,040-28,600 yuan/mt, with the average price rising from yesterday. On the cost side, MHP market circulation is tight, and the MHP price coefficient has risen this week, pushing up nickel salt production costs. On the supply side, some nickel salt smelters maintain a firm sentiment to stand firm on quotes due to rising raw material costs and low spot inventories. On the demand side, some precursor plants have restocking needs due to low raw material inventory levels, and their acceptance of nickel sulphate prices has also increased. Currently, buyers and sellers are still in a game stage on prices, and nickel sulphate prices are expected to have room to rise in the short term. Nickel Pig Iron: On April 2nd, the SMM 8-12% high-grade NPI average price was 1,030.5 yuan/mtu (ex-factory, tax included), flat with the previous working day. On the supply side, domestically, current Philippine nickel ore replenishment remains weak, smelter profits have slightly recovered, and production growth is limited. In Indonesia, nickel mine output still needs time to materialize, current premiums are high, and although there is new production, capacity release is relatively limited, with Indonesian NPI supply increasing slightly. On the demand side, stainless steel production remains high, demand for high-grade NPI is optimistic, and coupled with the current tight market circulation, NPI transaction prices are relatively concentrated, with active transactions recently and price ranges within the mainstream market range. In the short term, high-grade NPI prices are expected to fluctuate steadily. Stainless Steel: On April 2nd, stainless steel shipment market activity was poor, and downstream procurement enthusiasm was not high. Some stainless steel prices rose due to manufacturers' list price increases and cost increases. On the futures side, the most-traded contract 2505 fluctuated at highs. At 10:30 am, SS2505 was quoted at 13,570 yuan/mt, up 65 yuan/mt from the previous trading day. In Wuxi, 304/2B spot premiums/discounts were in the range of 200-500 yuan/mt. In the spot market, 200 series prices rose, 304 prices stabilized, and 316L hot-rolled coil prices increased. Supported by costs, prices rose, but market transactions were average. Specifically, in Wuxi and Foshan, cold-rolled 201/2B coils were quoted at 8,350 yuan/mt; cold-rolled cut edge 304/2B coils averaged 14,050 yuan/mt in Wuxi and 13,975 yuan/mt in Foshan; in Wuxi, cold-rolled 316L/2B coils were 24,350 yuan/mt, and in Foshan, 24,550 yuan/mt; hot-rolled 316L/NO.1 coils were quoted at 23,700 yuan/mt in both regions; in Wuxi and Foshan, cold-rolled 430/2B coils were 7,500 yuan/mt. Nickel Ore: Last week, Philippine low-grade and high-grade nickel ore prices held steady, while medium and high-grade FOB prices rose overall during the week, with medium and high-grade nickel ore prices seeing a slight increase again. The main reasons come from two aspects: first, as an exporter, Indonesian nickel ore prices climbed and still have room to rise, providing some support for Philippine nickel ore export prices; second, 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, while on the demand side, most domestic nickel pig iron plant inventories remain at low levels, with 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 losses, with limited ability to accept high-priced nickel ore. In terms of ocean freight rates, rates fell slightly during the week, with Surigao to Lianyungang, China rates down around $0.5/wmt. Overall, affected by the strong supply and weak demand pattern and rising Indonesian ore prices, Philippine prices rose. SMM expects that Philippine ore prices may continue to fluctuate upward in the short term. Current market transaction prices: For pyrometallurgical ore, SMM's Indonesia local ore 1.6% weekly price was $51/wmt; for hydrometallurgical ore, SMM's Indonesia local ore 1.2% weekly price was $26/wmt. Indonesian pyrometallurgical nickel ore may rise again in April, with current April premiums of $23-25 under negotiation, while hydrometallurgical ore CIF prices may temporarily hold steady with a downward bias. From a supply perspective, this year's Sulawesi rainy season has lasted longer, affecting nickel ore mining and transportation, with supply recovery in main mining areas like Sulawesi being relatively slow. In addition, the Indonesian Lebaran holiday from late March to early April, with mines and workers on holiday, will also affect nickel ore supply. From a demand perspective, Indonesian nickel pig iron smelters generally have low raw material inventories and need to restock just-in-time, coupled with expectations of NPI production increases, demand-side support remains. SMM expects nickel ore supply may continue to be tight. In terms of policy, expectations for the recent implementation of the PNBP policy remain strong. If the policy is implemented, nickel ore mine sales costs will increase, and coupled with the current continuous 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. For hydrometallurgical ore, downstream MHP has strong expectations for short-term production cuts, with demand support significantly weakening, and prices may fluctuate downward. Overall, SMM expects Indonesian local pyrometallurgical nickel ore prices may continue to rise, while Indonesian local hydrometallurgical nickel ore prices may hold steady with a downward bias.