The MHP coefficient continued to rise, while precursor manufacturers remained cautiously observant. [SMM Nickel Morning Meeting Summary]

4.10Nickel Morning Meeting Minutes

Refined Nickel:

SMM April 9:

Spot premiums/discounts: The mainstream spot premium quotation range for Jinchuan No. 1 nickel was 3,200-3,500 yuan/mt, with an average premium of 3,350 yuan/mt, down 150 yuan/mt from the previous trading day. The premium/discount quotation range for Russian nickel was 100-500 yuan/mt, with an average premium of 300 yuan/mt, up 50 yuan/mt from the previous trading day.

Futures: Nickel prices showed a volatile and strengthening trend today. As of 11:30, the closing price was 119,090 yuan/mt, down 0.09% from the previous trading day's settlement price, with a high of 117,400 yuan/mt.

Spot premiums/discounts: Jinchuan brand nickel prices fell by 150 yuan, mainly due to end-users choosing to purchase in large quantities as inventory after Monday's sharp decline in nickel prices. However, recent demand has not been effectively boosted, leading to a renewed pullback in purchase willingness, and traders chose to lower premiums to promote transactions.

From a macro perspective, recent nickel price fluctuations have been significant, deviating from fundamental analysis in the short term, with macro factors dominating price trends. Subsequent attention should be paid to European measures in response to the new US tax policy.

Price spread with nickel sulphate: Today, SMM 1# refined nickel prices were 118,750-122,800 yuan/mt, with an average price of 120,775 yuan/mt, down 975 yuan/mt from the previous trading day's spot price. Currently, refined nickel is at a discount of about 7,450 yuan/mt to nickel sulphate, and subsequent attention should be paid to changes in the spread.

Nickel Sulphate:

April 9, the SMM battery-grade nickel sulphate index price was 27,963 yuan/mt, with a quotation range of 27,920-28,500 yuan/mt, and the average price decreased compared to yesterday.

Cost side: Based on the reduction of Indonesian high-ice, market demand for MHP has increased, driving the MHP coefficient to continue rising. Recent floods in Indonesia have reduced MHP supply, further driving up the MHP quotation coefficient. LME nickel: Recently affected by US tariff policies, LME nickel prices have continued to fall. Overall production costs for nickel salt smelters have pulled back. Supply side: This week, based on reduced production costs, some nickel salt smelters have lowered their quotations. Some nickel salt smelters have not adjusted their quotations due to insufficient raw material inventory for Q2 and the MHP coefficient remaining high. Demand side: Some downstream psychological acceptance prices have lowered, precursor plants remain cautiously观望, and market inquiry activity is low. Looking ahead, nickel sulphate prices are expected to weaken due to cost reductions, but the decline is expected to be limited based on tight nickel salt supply and demand.

Nickel Pig Iron (NPI):

April 9, the SMM 8-12% high-grade NPI average price was 1,011.5 yuan/mtu (ex-factory, tax included), down 7.5 yuan/mtu from the previous working day. Supply side: Domestically, current smelter nickel ore inventory is low, and Philippine nickel ore shipments have increased, but it still takes time to reach domestic ports. Coupled with thin smelter profits, production is driven weakly, and output remains low. Indonesia: Recently in the Lebaran holiday, some park workers are on holiday, production load is reduced, and the tight pattern of Indonesian nickel ore supply remains unchanged. Although some new capacity has been released, overall output remains stable. Demand side: The fermentation of Trump's "reciprocal tariff" policy, the deep decline of LME non-ferrous varieties during the Qingming Festival, and nickel prices falling to near historical lows this year. Today, stainless steel futures fluctuated and fell, and leading stainless steel mills lowered their futures prices. In the short term, the market continues to focus on macro trends. As stainless steel prices continue to weaken, high-grade NPI prices have pulled back due to sluggish downstream procurement, and high-grade NPI prices are expected to be under pressure in the short term.

Stainless Steel:

April 9, the impact of US tariff policies continues to ferment, with market rumors of a 50% tariff on China. Affected by this, domestic futures markets generally fell after the daytime session opened. Stainless steel futures prices further declined, once approaching 12,600 yuan/mt. Under the pressure of a sharp decline in the futures market, the stainless steel spot market was unable to resist, and steel mills' original strategy of standing firm on quotes was difficult to maintain, with low-priced sources frequently emerging in the market. However, due to the widespread sentiment of rushing to buy amid continuous price rise and holding back amid price downturn, transactions were very sluggish.

Futures: The most-traded contract 2505 intensified its decline. At 10:30 am, SS2505 was quoted at 12,685 yuan/mt, down 195 yuan/mt from the previous trading day. The spot premium/discount for 304/2B in Wuxi was in the range of 585-885 yuan/mt. In the spot market, prices in various regions were as follows: cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 8,300 yuan/mt; cold-rolled cut edge 304/2B coils, Wuxi average price was 13,250 yuan/mt, Foshan average price was 13,300 yuan/mt; cold-rolled 316L/2B coils in Wuxi were 24,250 yuan/mt, Foshan was 24,500 yuan/mt; hot-rolled 316L/NO.1 coils in both regions were quoted at 23,550 yuan/mt; cold-rolled 430/2B coils in Wuxi and Foshan were both 7,500 yuan/mt.

Currently, the specific details of the US tariff policy are still unclear. Affected by market panic, stainless steel prices have fallen significantly. However, in-depth analysis shows that the fundamentals of stainless steel have not changed substantially, and stainless steel mills are currently in a state of cost inversion. Based on this, in the future, as market sentiment stabilizes, stainless steel prices are expected to regain strong support from the cost side. Subsequently, market participants need to continue to closely monitor the actual implementation of the US tariff policy and its subsequent impact on the entire stainless steel market, in order to adjust strategies in a timely manner and respond to market changes.

Nickel Ore:

Last week, prices for low-nickel and medium-high-grade nickel ore in the Philippines remained stable. From a supply and demand perspective, shipments of medium-high-frequency nickel ore from mines in the Surigao region increased significantly during the week, but the recovery of supply was limited by rainfall in the southern region. On the demand side, most domestic nickel iron plants still have low inventory, with strong demand for raw material procurement and high procurement enthusiasm. Although the recent rise in downstream high-grade NPI prices has brought some profit recovery, domestic iron plants are still in a state of cost inversion, with limited ability to accept high-priced nickel ore. Ocean freight rates: Ocean freight rates slightly decreased during the week, with rates from the Surigao region to Lianyungang, China, down by $10-10.5/wmt. In addition, since April, Indonesian nickel ore prices have risen significantly. Overall, SMM expects that after the surge in Philippine prices in March due to strong supply and weak demand and rising Indonesian ore prices, Philippine nickel ore prices may remain stable in the short term.

Current market transaction prices: For pyrometallurgical ore, the delivery-to-factory price for 1.6% Indonesian local ore is about $51-52/wmt; for hydrometallurgical ore, the delivery-to-factory price for 1.3% Indonesian local ore is about $25-26/wmt. Indonesian pyrometallurgical nickel ore prices rose again in April, with the current mainstream premium for Sulawesi Island in April at $24-25. Hydrometallurgical ore CIF prices remain stable but weak. From a supply perspective, the rainy season in Sulawesi has lasted longer this year, with frequent rainfall during the week, affecting nickel ore mining and transportation. The recovery of supply in main mining areas such as Sulawesi is relatively slow. In addition, last week was the Indonesian Lebaran holiday, with local mines and workers generally on holiday, and transactions during the week were relatively quiet. On the demand side, Indonesian nickel iron smelters generally have low raw material inventory and need to restock urgently, coupled with expectations of NPI production increases, demand-side support remains. SMM expects nickel ore supply may continue to be tight. Policy-wise, the implementation of the PNBP policy has been delayed. According to SMM, relevant Indonesian government departments are still discussing some details of the policy, and the market still strongly expects the policy to be implemented soon. For hydrometallurgical ore, downstream MHP has strong expectations of production cuts in the short term, demand support has significantly weakened, and prices may remain weak. Overall, SMM expects Indonesian local pyrometallurgical nickel ore prices may continue to rise, while Indonesian local hydrometallurgical nickel ore prices may remain stable but weak.