[smm analysis] last week's nickel intermediate product market review

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

In terms of the MHP spot market, some traders have run out of available spot resources and have temporarily stopped quoting. This phenomenon is mainly due to two factors: on one hand, the overall supply in the MHP spot market is tight, while downstream external purchase demand continues to be released; on the other hand, traders' own spot inventory levels are low, leading some to raise their payable indicators under the supply-demand mismatch. Additionally, cobalt intermediate product prices have risen concurrently, directly driving up cobalt sulphate prices, which in turn has led to a synchronous increase in the payable indicator for cobalt elements in MHP.

The high-grade nickel matte market was relatively sluggish this week. On the supply side, although the volume of external sales by traders was limited, the demand side failed to provide effective support, with downstream enterprises showing low enthusiasm for purchasing high-grade nickel matte, resulting in poor overall market trading activity. Under the dual-weakness pattern of supply and demand, no actual transactions were concluded in the recent high-grade nickel matte market, and the price coefficient remained stable.

Regarding the auxiliary material market, as a key auxiliary material for the production of nickel intermediate products, sulphur prices have shown an upward trend recently. In the short term, downstream demand is gradually recovering, coupled with a reduction in inventory buildup pressure at Chinese ports, leading to an increase in sulphur prices at Chinese ports, which in turn has driven up sulphur prices in the Indonesian market. Looking ahead to August, as China's autumn fertilizer preparation cycle approaches, the demand for sulphur in the fertilizer production sector is expected to be concentrated, providing strong support for sulphur prices. Therefore, it is anticipated that the overall sulphur prices in the Indonesian market in August will remain stable or continue to rise.

Overall, the rise in hydrometallurgy intermediate product prices this week was primarily driven by two factors: first, the direct boost from the increase in the MHP payable indicator; second, the support provided to the intermediate product market by the rise in LME nickel prices, spurred by US macro policies.