[SMM Analysis] Downstream Procurement Demand Was Released This Week, Providing Strong Support for the Nickel Intermediate Product Coefficient.

Downstream Procurement Demand Released This Week, Strong Support for Nickel Intermediate Coefficients

In the MHP market this week, on the demand side, some nickel salt and integrated precursor plants inquired and restocked, with enterprise raw material procurement demand released. Against this backdrop, demand-side support for the market significantly strengthened. On the supply side, driven by DRC policies, market expectations pushed cobalt sulphate prices up strongly, supporting the MHP cobalt coefficient, which remained flat at high levels. Affected by supply-demand and policies, the nickel and cobalt coefficients operated steadily this week.

Due to tight MHP supply, some nickel salt and refined nickel enterprises sought alternative raw materials, and market acceptance of high coefficients for high-grade nickel matte gradually increased. However, domestic spot resources were scarce, with insufficient liquidity, leading some traders to suspend quotations.

As a key auxiliary material for nickel intermediate production, sulphur prices rose significantly. Demand side, with phosphate fertiliser demand gradually releasing in Indonesia, Brazil, Africa and other regions, coupled with stockpiling for newly commissioned MHP projects in Indonesia, procurement demand provided strong support, and buyer acceptance of high prices improved. Supply side, seller spot available volume was insufficient. Tight supply-demand drove sulphur prices higher, and sulphur prices are expected to have further upside room.

Regarding nickel prices, amid weak fundamentals, ongoing US government shutdown risks, and escalating Sino-US trade friction, LME nickel prices overall declined WoW. Overall, affected by falling nickel prices, Indonesia MHP nickel FOB prices and Indonesia high-grade nickel matte FOB prices decreased, but driven by rising cobalt prices, Indonesia MHP cobalt FOB prices increased.