Frequent fluctuations in US tariff policies, stainless steel futures opened high and fluctuated [SMM Nickel Morning Meeting Summary]

4.15 Nickel Morning Meeting Minutes Refined Nickel: SMM Nickel April 14 Report: Spot market: Today, SMM1# refined nickel prices ranged from 122,950-126,250 yuan/mt, with an average price of 124,600 yuan/mt, up 2,500 yuan/mt from the previous trading day. The mainstream spot premium for Jinchuan No.1 nickel was quoted at 3,000-3,200 yuan/mt, with an average premium of 3,100 yuan/mt, down 100 yuan/mt from the previous trading day. The premium/discount for Russian nickel was quoted at 100-300 yuan/mt, with an average premium of 200 yuan/mt, down 50 yuan/mt from the previous trading day. Futures market: Nickel prices opened slightly higher in the morning and then fluctuated rangebound. As of 11:30, the closing price was 122,760 yuan/mt, up 1.61% from the previous trading day's settlement price, with a high of 123,790 yuan/mt. Indonesia is expected to implement a royalty increase policy soon, which is expected to raise nickel costs. However, the current macroeconomic uncertainty and recession expectations are putting pressure on base metal prices. The supply surplus of Class 1 and Class 2 nickel continues, and the market supply-demand pattern remains loose. Therefore, the upside potential for nickel prices is expected to be limited. Nickel Sulphate: On April 14, the SMM battery-grade nickel sulphate index price was 27,943 yuan/mt, with a quotation range of 27,920-28,500 yuan/mt, and the average price remained stable WoW. Cost side, based on the reduction of Indonesian high-ice nickel, the market demand for MHP has increased, driving the MHP coefficient to rise continuously. Recent floods in Indonesia have reduced MHP supply, further pushing up the MHP quotation coefficient. LME nickel prices have continued to decline recently due to US tariff policies. The overall production costs of nickel salt smelters have pulled back. Supply side, due to lower production costs this week, some nickel salt smelters have lowered their quotations. Some nickel salt smelters have not adjusted their quotations due to insufficient raw material inventory in Q2 and the MHP coefficient remaining high. Demand side, some downstream companies have lowered their psychological acceptance prices, and precursor plants remain cautious and wait-and-see, with low market inquiry activity. Looking ahead, nickel sulphate prices are expected to decline due to weakening costs, but the decline is expected to be limited due to tight supply and demand for nickel salts. Nickel Pig Iron: On April 14, the SMM 8-12% high-grade NPI average price was 994 yuan/mtu (ex-factory, tax included), down 2.5 yuan/mtu from the previous working day. Supply side, domestically, current nickel ore inventory at domestic smelters is low, coupled with declining smelter profits, some companies are still in maintenance periods, and overall production remains low. In Indonesia, short-term local ore premiums remain stable, and the policy expectation of increasing nickel ore tax rates is strong, providing strong cost support for smelters, while production remains stable despite declining profits. Demand side, stainless steel prices have recently fallen significantly, market procurement sentiment is weak, social inventory buildup is large, and stainless steel mills have weak demand for raw material procurement. In the short term, high-grade NPI prices remain under pressure. Stainless Steel: On April 14, the US announced exemptions from "reciprocal tariffs" on some goods. This tariff policy easing measure has boosted market confidence. As a result, SS futures opened higher today and fluctuated, holding above 12,800 points. In the stainless steel spot market, the strength of the futures market has played a driving role, prompting some market quotations to rise. However, the current market direction remains unclear, and market participants are in a wait-and-see mood. At the same time, due to the presence of some low-priced goods in the market, overall market prices remain largely stable. Futures side, the most-traded contract 2506 opened higher and fluctuated. At 10:30 am, SS2505 was quoted at 12,825 yuan/mt, up 175 yuan/mt from the previous trading day. In Wuxi, the 304/2B spot premium/discount ranged from 445-645 yuan/mt. In the spot market, cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 8,300 yuan/mt; cold-rolled cut edge 304/2B coils were quoted at 13,200 yuan/mt in Wuxi and 13,225 yuan/mt in Foshan; cold-rolled 316L/2B coils were quoted at 24,150 yuan/mt in Wuxi and 24,300 yuan/mt in Foshan; hot-rolled 316L/NO.1 coils were quoted at 23,300 yuan/mt in both regions; cold-rolled 430/2B coils were quoted at 7,500 yuan/mt in both Wuxi and Foshan. Currently, frequent and unpredictable US tariff policy fluctuations make the market highly susceptible to policy dynamics and news in the short term. Although high-grade NPI prices continue to decline, stainless steel mills still face the dilemma of cost and selling price inversion at current stainless steel price levels. As the traditional peak consumption season of "Golden March and Silver April" is underway, industry players remain confident in a future rebound in stainless steel prices. Going forward, market participants need to continue to closely monitor the actual implementation details of US tariff policies and the specific performance of stainless steel in the consumption end. Nickel Ore: Last week, Philippine low-Ni, high-Fe ore prices remained stable. From a supply-demand perspective, the rainy season in southern Philippines has basically ended, and shipments of medium-grade nickel ore from Surigao mines are expected to increase. On the demand side, after the introduction of Trump's tariff policy, nickel prices fell significantly, and domestic NPI prices fell during the week, reducing the acceptance of high-priced nickel ore. From an inventory perspective, domestic NPI plant inventory is relatively low, and just-in-time procurement demand still exists, but the acceptance of nickel ore prices is limited. On the cost side, NI1.25% nickel ore FOB quotations in Zambales were $32/wmt during the week, with CIF costs remaining above $43/wmt, but FOB prices may see a slight decline as shipments shift to Surigao. On ocean freight rates, rates fell slightly during the week, with rates from Surigao to Lianyungang, China down $10-10.5/wmt. Overall, SMM expects that due to increased supply and falling downstream NPI prices, Philippine nickel ore prices may see a slight decline in the future. Last week, global nickel prices fell significantly, with Trump's tariff policy and PNBP policy expectations once again affecting the market. However, as nickel ore orders for the first half of April have been signed, transaction prices remained stable this week. This week's transaction prices in the Indonesian market: for pyrometallurgical ore, local ore with 1.6% Ni was quoted at $51-52/wmt delivery-to-factory; for hydrometallurgical ore, local ore with 1.3% Ni was quoted at $25-26/wmt delivery-to-factory, unchanged WoW. In April, the mainstream premium for nickel ore procurement in the Sulawesi Island park remained at $24-25/wmt, and hydrometallurgical ore CIF prices remained stable but weak. From a supply perspective, for pyrometallurgical ore: on the supply side, the rainy season in Sulawesi Island has lasted for a long time, and rainfall remained frequent during the week, affecting nickel ore mining and transportation. However, overall, rainfall in Indonesia is expected to gradually decrease from April, and nickel ore supply is expected to increase. On the demand side, downstream NPI prices were impacted by the decline in nickel prices due to Trump's tariff policy, and NPI prices fell significantly during the week, weakening support for nickel ore prices. From an inventory perspective, raw material inventory at Indonesian NPI smelters is generally low, and just-in-time restocking is needed. Coupled with the expectation of NPI production increase, demand support still exists. Overall, SMM expects that the supply of Indonesian pyrometallurgical ore may remain tight. For hydrometallurgical ore: on the supply side, the tight supply of hydrometallurgical ore was not obvious during the week. On the demand side, the accident at the hydrometallurgical project in the Sulawesi park affected MHP demand in April. Overall, the supply of hydrometallurgical ore is relatively sufficient. On the policy side, Trump's tariff policy has impacted nickel prices, and the decline in downstream nickel product prices and the compression of profit margins may be transmitted to the nickel ore end in the future, leading to price and premium declines. However, Indonesia has once again raised expectations for the implementation of the PNBP policy. If the policy is implemented next week, the royalty increase will raise nickel ore sales costs, providing some support for nickel ore prices. Overall, the nickel ore market is currently mixed with bullish and bearish factors, but the main theme of tight supply remains. Future price trends need to pay attention to the negotiations between companies and mines on "whether to lower premiums in late April" and the continuation of the rainy season in Indonesia. SMM expects that local nickel ore prices in Indonesia will remain stable in the short term, with limited downside room.