[SMM MHP Daily Review] May 14, Indonesian MHP prices weakened

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As of now, the MHP coefficient (relative to the SMM battery-grade nickel sulphate index) stands at 84%-85%, with the FOB price of Indonesian MHP at $12,773/mt (Ni contained).

Demand side, this month's MHP prices fluctuated at highs due to weakened supply. Nickel salt smelters, concerned about costs, showed weaker sentiment in MHP procurement this month, with some reducing production or increasing the proportion of recycled materials as raw materials. Additionally, downstream demand in May showed no significant increase, leading to a production schedule for the overall nickel sulphate market that was basically flat compared to April. Therefore, MHP procurement sentiment eased in May. Supply side, Indonesian MHP projects gradually resumed in May, but MHP port arrivals were still affected by April's production cuts. Thus, MHP supply remained tight in May, with no downward trend in the MHP coefficient. Cost side, Indonesia's latest PNBP royalty policy is expected to be implemented on the 26th, which will directly increase the sales cost of nickel ore. Market feedback indicates that the policy-induced price increase for hydrometallurgical nickel ore procurement was already reflected in early April. Moreover, the royalty on hydrometallurgical ore itself is relatively low, with a 1.3-grade nickel ore requiring an additional $0.75/wmt compared to before the PNBP amendment. Therefore, the PNBP policy is expected to have a relatively limited impact on MHP production costs in the short term.

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