[SMM Analysis] Nickel Intermediate Products Affected by Both Policies and Supply-Demand, Prices Showed an Upward Trend This Week

Nickel Intermediate Products Affected by Policies and Supply-Demand Dynamics, Prices Rose This Week

From the performance of the MHP market this week, transaction activity was weak, but price trends were significantly influenced by cobalt prices. Demand side, the DRC announced an extension of the export ban and implemented quotas, and due to the transmission effect of continuously rising cobalt sulphate prices, the cobalt payable indicator in MHP also increased. Combined with the impact of downstream restocking, enterprises released raw material procurement demand. Against this backdrop, downstream enterprises gradually increased their acceptance of high-priced MHP, and support from the demand side for the market significantly strengthened. Supply side, spot cargo available in the market remained tight, sellers' bargaining power in transactions significantly improved, some traders raised their offers, forming price support. Considering factors from both supply and demand sides, MHP prices rose in absolute terms this week, driven by the increase in the payable indicator.

The high-grade nickel matte market currently shows a significant supply-demand mismatch. In terms of supply, domestic spot resources were scarce, liquidity was insufficient, leading some traders to suspend offers, while those still offering raised their prices. On the demand side, a small portion of downstream enterprises still had external purchase needs. To ensure production continuity, some enterprises began seeking alternative raw materials.

As a core raw material for nickel intermediate product production, sulphur prices showed a continuous rising trend recently. Supply side, the tight situation of overseas sulphur cargo persisted, and supplementary import resources were relatively limited. Demand side, newly commissioned MHP projects in Indonesia engaged in advance stockpiling. Driven by both supply constraints and demand growth, sulphur prices are expected to have further upside room in the future.

Regarding nickel prices, the impact of earlier copper mine incidents in Indonesia on nickel faded this week, combined with the influence of a strong US dollar on the macro front, nickel prices pulled back. Although nickel prices fell this week, FOB prices for MHP and high-grade nickel matte rose MoM, affected by increases in the MHP and high-grade nickel matte payable indicators.