[SMM Analysis] Nickel Hydrometallurgy Intermediate Products Affected by Declining Nickel Prices, Showing a Downward Trend

Nickel Intermediate Products Affected by Falling Nickel Prices, Prices Show a Downward Trend

From this week's MHP market performance, transaction activity was weak, but price trends were significantly influenced by nickel prices. Demand side, the overall supply and demand in the intermediate product market is tight, coupled with downstream demand entering the peak season, downstream enterprises' acceptance of high-priced MHP has gradually improved, and demand support has strengthened. Supply side, market available spot cargo remains tight, and seller offers are relatively firm, maintaining at high levels. This week, MHP market activity was relatively low, and the quotation coefficient remained stable. However, due to the release of increased refined nickel supply and high inventory suppressing nickel prices, the transmission impact of LME nickel price declines led to a certain degree of decline in MHP absolute prices.

High-grade nickel matte market, spot inventory is tight but demand is weak, prices fell with nickel prices. The current high-grade nickel matte market presents a divergent pattern of "tight inventory, weak demand." Spot inventory side, the market remains tight, with no significant signs of loosening on the supply side.

Demand side performed weakly, downstream enterprises' purchasing enthusiasm is relatively low, and most smelters have limited acceptance of the current high coefficient for high-grade nickel matte, resulting in overall weak market trading activity. The tight supply and demand situation failed to effectively translate into price support. Price side, directly affected by this week's decline in nickel prices, the absolute price of high-grade nickel matte experienced a certain degree of decline.

As a core raw material for nickel intermediate product production, sulfur prices recently showed a continuous upward trend. Specifically, on one hand, market concerns about the situation in the Middle East and the Russia-Ukraine conflict have intensified, increasing uncertainty in the sulfur supply chain; on the other hand, during the autumn fertilizer preparation peak season, demand for sulfur in the fertilizer production sector is concentratedly released, with supply and demand fundamentals supporting price increases. September market outlook, demand for sulfur in the fertilizer production sector is expected to continue to be released, providing strong support for sulfur prices. The Indonesian sulfur market price in September is highly likely to remain stable or continue the previous upward trend.