[SMM Analysis] Spot Supply of Nickel Sulphate Remains Tight, Prices Continue to Rise This Week

Spot supply of nickel sulphate remains tight, with prices continuing to rise this week.

As of Friday, the SMM battery-grade nickel sulphate index price was 27,433 yuan/mt, and the quotation range for battery-grade nickel sulphate was 27,450-27,790 yuan/mt, with the average price rising further WoW.

Demand side, some precursor plants have low raw material inventories and recently have restocking needs, showing more active inquiries and a higher acceptance of nickel salt prices. Supply side, nickel salt smelters have limited spot orders, coupled with high raw material cost pressure, supporting the continuous upward trend in nickel salt quotations. Looking ahead, as the month-end procurement period approaches, with current tight spot supply of nickel sulphate, it is expected that nickel salt prices will continue to rise.

Inventory, the upstream nickel salt smelter inventory index decreased from 5.8 days to 5 days this week, while the downstream precursor plant inventory index fell from 10.6 days to 10.2 days, indicating a decline in both buyer and seller inventories; the integrated enterprise inventory index stood at 7.4 days. In terms of market sentiment, the upstream nickel salt smelter sentiment factor dropped from 1.5 to 1.4, and the downstream precursor plant purchasing sentiment factor declined from 3.1 to 3.0, reflecting that although some buyers still have procurement needs, sellers' willingness to sell is weak; the integrated enterprise sentiment factor remained at 1.8. (Historical data can be queried in the database.)

Nickel prices continued to fall this week, reducing the production cost of nickel salts.

Cost side, the MHP raw material market saw tighter circulation, with the MHP payable indicator rising this week. Nickel prices were mainly influenced by changes in expectations for US Fed interest rate cuts, leading to a further pullback in LME nickel prices. Overall, nickel prices declined WoW, with the increase in the MHP payable indicator providing some support, resulting in a slight decrease in the immediate production cost of nickel salts. As of Friday, the profit margin using MHP was -1.1%, crude slag -1.4%, nickel briquette -2.4%, and high-grade nickel matte 4.9%.