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Nickel prices have rebounded recently, and the activity in the stainless steel market has increased [SMM Nickel Morning Meeting Summary]

iconJul 4, 2025 09:15
Source:SMM
[7.4 Morning Meeting Minutes] Affected by the general rise in non-ferrous metals and the rebound from oversold conditions, LME nickel prices rebounded. Overall, the immediate production cost of nickel salts has increased. Supply side, some nickel salt smelters halted production for maintenance due to losses, while others maintained stable quotes. Demand side, precursor plants have seen a decrease in inquiry enthusiasm due to weak demand. This week, market transaction and inquiry activity remained at a low level.

7.4 Morning Meeting Minutes

Macro News:

(1) Wang Yi, member of the Political Bureau of the CPC Central Committee and Minister of Foreign Affairs, held the 13th round of China-EU High-Level Strategic Dialogue with Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy, in Brussels. Wang Yi emphasized that China-EU relations should be positioned as partners rather than rivals, with cooperation as the main theme. Both sides should strengthen exchanges, deepen understanding, enhance mutual trust, and advance cooperation to jointly safeguard the post-war international order.

(2) US June employment data: ADP employment decreased by 33,000 in June, the largest decline since March 2023. The number of job cuts announced by Challenger, Gray & Christmas in June was 47,999, the lowest since December 2024. Interest rate futures almost fully priced in a September interest rate cut by the US Fed.

 

Refined Nickel:

Spot Market:

Today, the SMM 1# refined nickel price was 121,200-123,900 yuan/mt, with an average price of 122,550 yuan/mt, up 500 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel was 2,200-2,400 yuan/mt, with an average premium of 2,300 yuan/mt, down 200 yuan/mt from the previous trading day. The spot premiums and discounts quotation range for electrodeposited nickel from mainstream domestic brands was -100-300 yuan/mt.

 

Futures Market:

The most-traded SHFE nickel contract (2508) was strong in the night session but under pressure in the daytime session: it closed up 0.70% at 121,670 yuan/mt in the night session (LME nickel also rose 0.9% to $15,320/mt). In the daytime session, it pulled back: opening at 121,280 yuan/mt (up 460 yuan from the previous settlement), but falling under pressure in the afternoon, closing at 121,440 yuan/mt by midday, up 0.51% for the day.

Driven by the macro sentiment of "anti-cut-throat competition," nickel prices have rebounded recently. However, with downstream demand currently in the off-season, the long-term surplus pattern of nickel is difficult to reverse, and nickel prices remain under pressure in the future market.

 

Nickel Sulphate:

On July 3, the SMM battery-grade nickel sulphate index price was 27,194 yuan/mt, with a quotation range for battery-grade nickel sulphate of 27,200-27,600 yuan/mt, and the average price remaining stable compared to yesterday.

On the cost side, influenced by the general rise in non-ferrous metals and the oversold rebound, LME nickel prices have rebounded. Overall, the immediate production cost of nickel salts has increased. From the supply side, some nickel salt smelters have halted production for maintenance due to losses, while some have maintained stable quotations. From the demand side, precursor plants have seen a decrease in inquiry enthusiasm due to weak demand. Market transaction and inquiry activity remained low this week.

Looking ahead, it is expected that prices will remain stable due to weak downstream demand and the reluctance to budge on prices from nickel salt smelters.

 

NPI:

On July 3, the average price of SMM 8-12% high-grade NPI stood at 908.5 yuan/mtu (ex-factory, tax included), marking a decrease of 1.5 yuan/mtu from the previous working day. Supply side, domestically, the price of nickel ore from the Philippines continued to fluctuate upward, resulting in severe losses for domestic smelters. With weakened production incentives, there is an expectation of a decline in production. In Indonesia, nickel ore premiums have slightly decreased, alleviating the losses for smelters but to a limited extent. The low price of finished products has led some smelters to reduce their production loads, resulting in a weakening of production. Demand side, stainless steel has entered the traditional consumption off-season, and the spot price of stainless steel has not shown significant improvement. There is an expectation of a decrease in stainless steel production, leading to a weakening demand for high-grade NPI. Additionally, as the long-term contracts of downstream steel mills have already met part of the demand, spot order purchases in the market have been sluggish. In the short term, the price of high-grade NPI remains under pressure.

 

Stainless Steel:

On July 3, SMM reported that the SS futures market continued to strengthen, further exploring and successfully breaking through the 12,700 yuan/mt threshold. In the spot market, driven by the continuous rise in the futures market, the activity of the stainless steel spot market has increased, and transaction volumes have also recovered. Despite being in the consumption off-season, the upward momentum of stainless steel spot prices has not matched that of the futures market. However, driven by the futures market, the supply of low-priced goods has gradually decreased. This week, the social inventory of stainless steel further decreased by 1.42% WoW, dropping to 978,000 mt.

In the futures market, the most-traded contract 2508 strengthened and rose. At 10:30 a.m., SS2508 was quoted at 12,675 yuan/mt, up 40 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums and discounts for 304/2B stainless steel ranged from 135-335 yuan/mt. In the spot market, the cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 7,625 yuan/mt; the cold-rolled uncut edge 304/2B coils had an average price of 12,700 yuan/mt in Wuxi and 12,700 yuan/mt in Foshan; the cold-rolled 316L/2B coils were priced at 23,800 yuan/mt in Wuxi and 23,800 yuan/mt in Foshan; the hot-rolled 316L/NO.1 coils were both quoted at 23,100 yuan/mt in Wuxi and Foshan; and the cold-rolled 430/2B coils were both priced at 7,250 yuan/mt in Wuxi and Foshan.

Currently, the stainless steel market is still in the traditional consumption off-season, and downstream demand fails to match the current supply level. Additionally, uncertainties such as US tariffs remain significant, leading to a strong wait-and-see sentiment among downstream players. Despite stainless steel mills generally facing the dilemma of losses and market news of production cuts, due to the large production base in the early stage, the current market supply remains at a historically high level for the same period. The restoration of the supply-demand relationship still requires time. Both steel mill inventories and social inventories are at relatively high levels. Against the backdrop of the consumption off-season, the de-stocking speed has significantly slowed down, placing significant pressure on stainless steel mills, agents, and traders to sell goods, thereby limiting the rebound and rise of stainless steel prices. The raw material sector is also under significant pressure. Affected by expectations for production cuts at steel mills, only high-carbon ferrochrome has managed to maintain stable tender prices of steel mill amid production cuts by overseas ferrochrome producers. However, the market retail price has fallen below the tender price. Prices for other raw materials, such as high-grade NPI and stainless steel scrap, have also weakened significantly, further eroding the cost support for stainless steel. The market is now waiting to see how the supply-demand relationship will recover after production cuts by stainless steel mills.

 

Nickel Ore:

Philippine nickel ore prices remain stable. Amid smelter losses, downstream acceptance of high-priced nickel ore is limited.

Last week, the FOB price of Philippine nickel ore remained stable, and domestic transaction prices also held steady temporarily. 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 rainfall during the week significantly impacted the loading progress at nickel mines, causing widespread delays compared to expectations. On the demand side, NPI prices continued to fall this week, and domestic NPI smelters still faced severe losses. The sentiment for raw material purchases was dampened, and the demand-side support for nickel ore prices continued to weaken. Looking ahead, under the influence of multiple factors such as the decline in Indonesia's local nickel ore prices this week, continued losses at downstream smelters, and limited willingness to purchase at high prices, Philippine nickel ore prices may weaken.

Indonesian nickel ore prices changed last week, with saprolite ore prices experiencing a downward trend.

This week, prices for Indonesia's local nickel ore have fallen. In terms of premiums, the mainstream premium for Indonesia's local laterite nickel ore this week dropped to $24-26/wmt. Currently, the SMM delivery-to-factory price for Indonesia's local 1.6% laterite nickel ore is $50.9-54.9/wmt, a decrease of $2.5 WoW. For limonite ore prices, the SMM delivery-to-factory price for Indonesia's local 1.3% laterite nickel ore remained stable at $26-28/wmt, unchanged from last week.

For saprolite ore, on the supply side, Sulawesi and Halmahera, as the main nickel ore mining regions, still faced supply disruptions due to frequent precipitation during the week, with mining and transportation processes at some mines being hindered. Nevertheless, the approval of some supplementary RKAB quotas may be expected to progress. After entering July, the RKAB approval progress may accelerate. From the demand side, due to continued high operating losses, most Indonesian NPI smelters find it difficult to sustain high premiums. Overall, although Indonesia's saprolite ore is in a tight state, downstream enterprises continue to exert pressure to reduce premiums to ensure affordable nickel ore purchases. The HMA price in the first half of July has already declined. Looking ahead, there is still downside room for prices in July.

Regarding limonite ore, supply side, due to the support of several months' inventory accumulated after the QMB accident in March, the current supply of limonite ore in Sulawesi remains relatively stable, meeting current market demand. However, it should be noted that the rainy season in Sulawesi and Halmahera continues, and if it persists into Q3, it may pose supply risks. Demand side, two major HPAL projects are expected to commence production in H2 this year, which may significantly drive up market demand. Therefore, there is still demand for limonite ore. Looking ahead, the price of limonite ore in Indonesia is more likely to rise than fall.

For queries, please contact Lemon Zhao at lemonzhao@smm.cn

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