[SMM Analysis] Supply and demand of nickel intermediate products are tight, and prices continue to strengthen

Nickel intermediate product supply and demand remained tight, with prices continuing to strengthen.

In the MHP spot market, some traders have temporarily suspended quotations as their available spot cargo resources have been depleted. This phenomenon stems from two main factors: First, the overall MHP spot market supply remains tight, while downstream enterprises continue to release certain external purchase demand. Second, traders' own spot inventory levels are low, leading some to opportunistically raise payable indicators amid the supply-demand mismatch. Additionally, cobalt intermediate product prices rose during the same period, directly boosting cobalt sulphate prices and consequently driving up the payable indicators for cobalt content in MHP.

The high-grade nickel matte market remained relatively sluggish this week. On the supply side, although traders had limited external sales volumes, demand failed to provide effective support, with downstream enterprises showing low purchasing enthusiasm for high-grade nickel matte, resulting in overall poor market activity. Under this weak supply-demand dynamic, no actual transactions were concluded recently, and price coefficients remained stable.

Auxiliary material market, sulphur prices, a key auxiliary material for nickel intermediate product production, showed an upward trend recently. In the short term, downstream demand gradually recovered, coupled with easing inventory buildup pressure at Chinese ports, driving up sulphur prices at Chinese ports and subsequently pushing up prices in the Indonesian market. Looking ahead to August, with China's autumn fertilizer preparation cycle approaching, demand from fertilizer production is expected to concentrate, providing strong support for sulphur prices. Therefore, Indonesian sulphur prices are anticipated to remain stable or continue their upward trend in August.

Overall, this week's price increase for hydrometallurgy intermediate products was mainly driven by two factors: the direct boost from higher MHP payable indicators and the support from rising LME nickel prices under US macro policy stimulus.