The deadline for the US global tariff is approaching, and the rebound trend of nickel prices is hindered [SMM Nickel Morning Meeting Summary]

7.7 Morning Meeting Minutes

Macro News:

(1) US Treasury Secretary Bessent: Multiple major agreements are close to being finalized; if countries that receive tariff letters fail to reach agreements, tariffs will revert to April levels starting August 1; US Commerce Secretary Lutnick: Tariffs will take effect on August 1, and Trump "is now setting tariff rates and agreements"; White House economic advisor Hassett also indicated that some trade negotiations may extend beyond the deadline.

(2) On July 6, 2025, Premier Li Qiang of the State Council attended the first phase of the 17th BRICS Leaders' Summit in Rio de Janeiro, delivering a speech on the topics of "Peace and Security, Global Governance Reform". Leaders of BRICS member countries participated in the summit, which was chaired by Brazilian President Lula. The summit adopted the "Rio de Janeiro Declaration of the 17th BRICS Leaders' Summit".

Refined Nickel:

Spot Market:

Today, the SMM 1# refined nickel price is 120,700-123,300 yuan/mt, with an average price of 122,000 yuan/mt, down 1,450 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel is 1,900-2,200 yuan/mt, with an average premium of 2,050 yuan/mt, down 50 yuan/mt from the previous trading day. The spot premiums and discounts quotation range for electrodeposited nickel from mainstream domestic brands is -200-300 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2508) fell rapidly after opening today, with the intraday decline accelerating. By midday, SHFE nickel was quoted at 120,870 yuan/mt, down 1.31%, a significant drop.

In the near term, nickel prices may oscillate weakly within the range of 118,000-123,000 yuan/mt. Trump's July 9 global tariff deadline is approaching, and countries that have not reached trade agreements face the risk of tariff increases. Market risk aversion has surged, with macro risk aversion suppressing rebound momentum.

Nickel Sulphate:

On July 7, the SMM battery-grade nickel sulphate index price was 27,202 yuan/mt, with a quotation range for battery-grade nickel sulphate of 27,200-27,620 yuan/mt, and an average price basically flat WoW.

Cost side, with the approaching US global tariff deadline, affected by risk aversion due to tariff uncertainties, the rebound trend in nickel prices has been hindered, and LME nickel prices have pulled back. Overall, the immediate cost of nickel salts may decline; Supply side, some salt plants have the intention to raise prices due to the recent increase in raw material costs, but weak buyer demand has led to fewer transactions, with overall inventory and production schedule levels remaining low; Demand side, the procurement enthusiasm of precursor plants remains weak, and after completing stockpiling for this month at the end of last month, they are mainly adopting a wait-and-see approach.

Looking ahead, production costs pulled back while downstream demand remained weak. Despite nickel salt smelters' persistent refusal to budge on prices, nickel salt prices are likely to stabilize at low levels.

NPI:

On July 7, SMM reported the average price of 8-12% high-grade NPI at 907.5 yuan/mtu (ex-factory, tax included), flat from the previous trading day. Supply side, domestic nickel ore prices from the Philippines held firm, with smelters still operating at losses, keeping overall production at low levels. In Indonesia, pyrometallurgical nickel ore premiums weakened slightly, easing smelter cost pressures. However, as some smelters faced expanding production losses, maintenance expectations emerged, potentially leading to a slight decline in overall output. Demand side, stainless steel entered the consumption off-season with sluggish downstream demand and persistently high social inventory, suggesting potential production cuts and weaker NPI demand. Short-term NPI prices remain under pressure.

Stainless Steel:

On July 7, SMM reported SS futures pulled back during the day, with the low point revisiting the 12,600 yuan/mt threshold. The spot market largely continued last week's trend without significant price fluctuations. Against the backdrop of futures initially jumping and then pulling back, market acceptance of high prices further declined, with traders occasionally offering discounts to facilitate transactions. Currently in the off-season with low prices, the market remains in a stalemate. Although steel mills have begun production cuts due to losses, clearing existing inventory will take time.

Futures side, the most-traded contract SS2508 pulled back. At 10:30 am, SS2508 traded at 12,695 yuan/mt, down 55 yuan/mt from the previous session. Wuxi's 304/2B spot premiums/discounts ranged between 125-275 yuan/mt. In spot markets, Wuxi and Foshan both quoted 2B cold-rolled 201 coils at 7,600 yuan/mt; 304/2B cold-rolled uncut edge coils averaged 12,725 yuan/mt in both cities; Wuxi's 316L/2B cold-rolled coils traded at 23,600 yuan/mt, matching Foshan's price; 316L/NO.1 hot-rolled coils were quoted at 22,900 yuan/mt in both locations; 430/2B cold-rolled coils traded at 7,100 yuan/mt in both cities.

Currently, although stainless steel social inventory declined and market confidence recovered slightly with improved transaction volumes, the sector remains in the traditional consumption off-season without significant end-use demand improvement. Transactions continue to be heavily influenced by futures and news flow, with low acceptance of high-priced material keeping spot prices relatively depressed. Despite two consecutive weeks of inventory pullback, overall levels remain elevated, and steel mills' in-plant inventory and front warehouses still face substantial destocking pressure, delaying the recovery of stainless steel's supply-demand relationship. Additionally, under the influence of expectations for production cuts at stainless steel mills, the demand for high-grade NPI has declined, and nickel iron prices have remained low, weakening the cost support for stainless steel.

Nickel Ore:

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

Last week, Philippine medium-grade nickel ore prices fell. The CIF price of Philippine laterite nickel ore NI1.3% to China was $45-47/wmt, and the FOB price was $36-38/wmt; the CIF price of NI1.5% was $58-61/wmt, and the FOB price was $51-53/wmt. In terms of supply and demand, on the supply side, rainfall in the main producing areas of southern Philippines decreased slightly compared to last week, with rainfall in the southern region of Palawan remaining the same as last week and almost no rainfall in the area east of Davao. The main rainfall was concentrated in the Zambales region. Overall, precipitation had no significant impact on shipments, and the supply of nickel ore increased. As of July 4, China's nickel ore port inventory increased to 6.63 million wmt. Ships dispatched earlier have arrived at ports one after another, leading to an increase in inventory. On the demand side, the decline in NPI prices continued this week. Domestic NPI smelters still face severe losses, raw material purchase sentiment has been dampened, and the support for nickel ore prices from the demand side continues to weaken. Looking ahead, under the influence of multiple factors such as the decline in Indonesia's local laterite nickel ore prices last week, continued losses at downstream smelters, limited willingness to purchase high-priced ore, and an increase in port inventory, Philippine nickel ore prices are expected to continue to weaken.

Indonesia's benchmark price for the first half of July falls, and saprolite ore prices follow a downward trend.

Indonesian nickel ore prices fell again last week. In terms of premiums, the mainstream premium for Indonesia's local laterite nickel ore remained at $24-26/wmt last week. In terms of benchmark prices, the HMA price for the first half of July fell slightly to 14,943 yuan/mt, down 1.83% MoM from the previous period. The SMM delivery-to-factory price of Indonesia's local laterite nickel ore 1.6% was $50.4-54.4/wmt, down $0.5 or 0.9% WoW. In terms of limonite ore prices, the SMM delivery-to-factory price of Indonesia's local laterite nickel ore 1.3% remained stable at $26-28/wmt, unchanged from last week.

For saprolite ore, on the supply side, affected by continuous precipitation, mining and transportation operations in the main nickel ore producing areas of Sulawesi and Halmahera in Indonesia were still disrupted this week. Nevertheless, progress has been made in the approval of some new quotas and quota revisions for RKAB. It is expected that the approval of RKAB will continue to advance in July and August. Therefore, influenced by this factor, the future supply of nickel ore may further increase. Demand side, most NPI smelters in Indonesia continue to struggle with high nickel ore prices, with some smelters still experiencing losses, and even some smelters cutting production, leading to a decrease in procurement demand. Overall, despite the continued tightness in Indonesia's nickel ore supply due to the rainy season, the downward pressure exerted by nickel iron smelters has made it difficult to maintain prices at a high level. Looking ahead, the prices of saprolite ore will still be in the doldrums.

Regarding limonite ore, supply side, the current supply of limonite ore in Sulawesi remains relatively stable, meeting the current market demand. In addition, the approval of RKAB is expected to make significant progress in the coming months, which may drive a further increase in supply. Demand side, the production of MHP projects is normal, and the demand for limonite ore remains stable. In the long term, with the potential progress in the approval of supplementary RKAB quotas, it is expected that the prices of limonite ore may also be in the doldrums.