[SMM Analysis] Tight Nickel Intermediate Product Market with Overall Strengthening Coefficients

Nickel Intermediate Product Market Remains Tight With Overall Coefficient Strengthening

This week, the MHP market showed sustained demand-side support, as some refined nickel producers maintained procurement needs and continued MHP inquiries. Supply side, affected by overall tight supply-demand balance and scarce cargoes, some traders suspended offers due to inventory shortages, while remaining quotations trended upward. Considering both supply and demand factors, MHP absolute prices rose this week, driven by coefficient increases.

High-grade nickel matte market witnessed tight spot inventory, prompting some traders to raise offers. However, demand-side support remained weak, with downstream enterprises showing low acceptance of high-priced nickel matte, resulting in subdued overall market activity. Although the nickel matte price coefficient edged up due to sellers' higher offers, absolute prices declined this week, dragged down by falling nickel prices.

Auxiliary material market saw sustained sulfur price increases, a key raw material for nickel intermediate production. Indonesian sulfur prices rose this week as local smelters passively accepted high-priced spot cargoes to maintain production continuity. Looking ahead to August, China's autumn fertilizer preparation cycle is expected to concentrate sulfur demand from fertilizer production, providing strong price support. Indonesian sulfur prices are therefore projected to remain stable or continue upward in August.

Overall, LME nickel prices declined this week amid macro pressure from a stronger US dollar and weak fundamentals, with cautious market sentiment prevailing. The most-traded SHFE nickel NI2510 contract fluctuated downward, closing at 119,610 yuan/mt on Friday, down 0.48% daily and 0.99% over five trading days. Both MHP and nickel matte prices were affected by nickel's downturn, but MHP gained due to tight supply-demand and demand support, while nickel matte fell on insufficient demand.