Morning Meeting Minutes on June 25
Macro News:
(1) According to CCTV News, Iran and Israel have announced a formal ceasefire.
(2) On June 23, nine departments including the Ministry of Industry and Information Technology issued the Implementation Plan for High-Quality Development of the Gold Industry (2025-2027). The Plan proposes that by 2027, resource security capabilities and innovation levels in the industry chain will be significantly enhanced. Gold resource reserves will increase by 5%-10%, and gold and silver production will increase by over 5%. Mines with a daily gold ore processing capacity of over 500 tons will account for over 70% of the national output. The comprehensive utilization rate of gold solid waste will increase to over 35%.
Spot Market:
Today, the SMM 1# refined nickel price is 117,350-120,650 yuan/mt, with an average price of 119,000 yuan/mt, down 500 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel are quoted in the range of 2,800-3,200 yuan/mt, with an average premium of 3,000 yuan/mt, up 400 yuan/mt from the previous trading day. The spot premiums and discounts for electrodeposited nickel from mainstream domestic brands are quoted in the range of 0-500 yuan/mt.
Futures Market:
The most-traded SHFE nickel contract (2507) broke below key support levels during the day: the night session closed down 0.51% at 117,370 yuan/mt (LME nickel also fell 1.46% to $14,840/mt); the daytime session continued to decline, and as of the midday close, SHFE nickel was quoted at 117,020 yuan/mt, down 950 yuan/mt or 0.81%.
The surplus pattern of refined nickel is difficult to reverse, and the price center may gradually move lower. It is expected that nickel prices will maintain sideways movement within the range of 115,000-121,000 yuan/mt. Ore price support and cost lines form the bottom, but macro risk-aversion sentiment and inventory pressure inhibit rebound momentum.
Nickel Sulphate:
On June 24, the SMM battery-grade nickel sulphate index price was 27,200 yuan/mt, with a quotation range for battery-grade nickel sulphate of 27,200-27,600 yuan/mt, and an average price unchanged WoW.
On the cost side, affected by the extension of the cobalt ban in the DRC, the demand for nickel from ternary materials has been suppressed, driving LME nickel prices to continue to decline. Overall, the production cost of nickel salts has decreased. From the supply side, the extension of the cobalt ban has driven up the reluctance to budge on prices among some nickel salt smelters, and some have already stopped quoting prices. From the demand side, some precursor plants have raised their price acceptance for nickel salts. Most precursor plants are adopting a wait-and-see approach. Overall, the extension of the cobalt ban has driven up sentiment for nickel sulphate, but downstream demand remains weak.
Looking ahead, it is expected that sentiment will drive up nickel salt prices, but the extent of the increase will still be limited by weak downstream demand.
NPI:
On June 24, the average price of SMM 8-12% high-grade NPI was 915 yuan/mtu (ex-factory, tax included), down 5 yuan/mtu from the previous working day. Supply side, domestically, nickel ore prices in the Philippines continued to fluctuate upward, leading to severe losses for domestic smelters. Some smelters reduced their production loads, with production expected to decline. In Indonesia, domestic trade pyrometallurgical nickel ore premiums remained firm. The decline in finished product prices led to continued losses for smelters. However, pyrometallurgical high-grade nickel matte is also currently in a loss-making phase, and downstream demand is weaker than that for high-grade NPI, so production may see a slight increase. Demand side, social inventory destocking remained slow. Stainless steel prices continued to test historical lows, and mainstream steel mills had weak demand for raw material procurement. With the expanding economic advantage of stainless steel scrap as a raw material, demand for high-grade NPI may weaken. Overall, in the short term, stainless steel will continue to focus on active destocking, with prices likely to remain in the doldrums. The raw material side is under significant pressure, and high-grade NPI prices may continue to fluctuate downward.
Stainless Steel:
On June 24, SMM reported that the SS futures market opened low and hit bottom, refreshing a new five-year low. However, in the afternoon, influenced by news of production cuts at a major domestic stainless steel mill, the market stopped falling and rebounded. In the spot market, Tsingshan once again lowered its 300-series plate prices in the morning, with a decrease of 200-300 yuan/mt, leading to a further decline in spot market prices. The base price of 304 cold-rolled uncut edge steel coils had dropped to 12,100 yuan/mt, returning to the price level of early 2020. The continuous decline in prices further intensified downstream wait-and-see sentiment, and transactions did not recover despite the price pullback. At noon, news of production cuts at a major domestic large-scale stainless steel mill spread, boosting market sentiment, and futures and spot prices rebounded simultaneously.
In the futures market, the most-traded 2508 contract bottomed out and rebounded. At 10:30 a.m., SS2508 was reported at 12,340 yuan/mt, down 165 yuan/mt from the previous trading day. Spot premiums and discounts for 304/2B in Wuxi were in the range of 280-530 yuan/mt. In the spot market, cold-rolled 201/2B coils in both Wuxi and Foshan were reported at 7,575 yuan/mt; cold-rolled uncut edge 304/2B coils had an average price of 12,575 yuan/mt in Wuxi and 12,575 yuan/mt in Foshan; cold-rolled 316L/2B coils were 23,700 yuan/mt in Wuxi and 23,700 yuan/mt in Foshan; hot-rolled 316L/NO.1 coils were 23,000 yuan/mt in both Wuxi and Foshan; cold-rolled 430/2B coils were 7,350 yuan/mt in both Wuxi and Foshan.
Currently, the stainless steel market is in the traditional off-season, with persistent weak downstream demand. Despite enterprises generally facing the dilemma of losses, some steel mills have begun to implement production cuts. However, due to the large production base in the early stage, current market supply remains at a historically high level for the same period, and the contradiction of oversupply is particularly prominent. The shipping pressure on stainless steel mills, agents, and traders has risen sharply. Both steel mill inventories and social inventories remain high, and market pessimism has spread widely. Traders are scrambling to ship goods, leading to a continuous decline in stainless steel quotes. The raw material side is also under tremendous pressure. Affected by expectations for production cuts at steel mills, the prices of raw materials such as high-grade NPI and stainless steel scrap have also weakened simultaneously, further eroding the cost support for stainless steel. The market is now waiting to see how the supply-demand relationship will recover after stainless steel mills cut production.
Nickel Ore:
Philippine Mine Offer Prices Rise, Domestic Enterprise Losses Widen Again
Last week, the FOB price of Philippine nickel ore rose slightly, while domestic transaction prices remained stable for the time being. The CIF price of Philippine laterite nickel ore (NI1.3%) shipped to China was $46-47/wmt, and the FOB price was $37-38/wmt; the CIF price of NI1.5% was $59-61/wmt, and the FOB price was $52-53/wmt. In terms of supply and demand, on the supply side, although there was precipitation at major nickel ore loading points in the Philippines, the continuous rainy weather during the week significantly impacted the loading progress of nickel mines, causing widespread delays in loading compared to expectations. On the demand side, the price of downstream NPI fell again, and domestic NPI smelters continued to face severe losses. The sentiment for raw material procurement was frustrated, and the demand-side support for nickel ore prices continued to weaken. Regarding exports to Indonesia, Indonesia's demand for Philippine nickel ore increased, and the high nickel ore prices in Indonesia continued to deepen the reluctance of Philippine mines to budge on prices. Looking ahead, there is currently a significant price battle between upstream and downstream players, coupled with price disturbances from the Indonesian side. In the short term, Philippine nickel ore prices may remain stable at a high level. Domestic enterprise losses continue to widen, and they may be forced to choose between purchasing at high prices or cutting production.
HPM Prices Continue to Fall, Indonesian Prices Change This Week, But Premiums Remain High
Last week, the prices of Indonesia's local ore changed. In terms of premiums, the mainstream premium for Indonesia's local laterite nickel ore remained at $26-28/wmt this week. In terms of benchmark prices, the HMA price for the second half of June remained stable with a slight decline, at $15,221/mt, down 1.19% MoM from the previous period. Overall, the prices of saprolite ore have decreased this week. The SMM delivery-to-factory price for Indonesia's local laterite nickel ore (1.6%) was $53.9-56.9/wmt, down $0.4/wmt WoW. In terms of limonite ore prices, the SMM delivery-to-factory price for Indonesia's local laterite nickel ore (1.3%) remained stable at $26-28/wmt, the same as last week.
Regarding saprolite ore, from the supply side, the ongoing rainy season in the Sulawesi and Halmahera regions remains a key constraint on mining and transportation activities. In addition, although the supplementary RKAB quotas for Indonesia were approved starting in H2, there has been no significant increase in quotas so far. Therefore, the slow approval process has exacerbated the tight supply situation for saprolite ore. In terms of demand, the SMM NPI price in Indonesia fell again this week, and Indonesian NPI smelters are still operating at a cost disadvantage. Additionally, the market procurement sentiment for stainless steel has weakened somewhat due to production cuts at some smelters. However, given the current tight supply of ore mentioned above, Indonesian smelters, in order to maintain the supply of raw materials needed for production, have no choice but to passively accept the current high prices despite operating at a loss.
In terms of limonite ore supply, although the rainy season in Indonesia continues, there has been no significant tightening in the supply of limonite ore recently. In terms of demand, most of the HPAL projects in the MOROWALI Industrial Park have resumed production, and market demand for limonite ore has increased. Additionally, with the expected commissioning of larger HPAL smelting projects in H2, there may be a significant increase in demand for limonite ore in the future. Looking ahead, the price of Indonesian limonite ore may hold up well.
