[SMM Analysis] Nickel Intermediate Product Prices Rose This Week, Affected by Both Policies and Supply-Demand Dynamics

The supply-demand tightness in the MHP market persisted. Supply side, spot MHP availability remained limited, and sellers were keen to hold prices firm. Demand side, affected by the DRC's cobalt intermediate product export quota policy, MHP's role as a substitute raw material for cobalt intermediates became more prominent, providing strong support for the cobalt payables in MHP. Coupled with the installation rush demand driven by the phase-out of new energy subsidies in 2026, downstream nickel sulfate and refined nickel plants showed increased acceptance of nickel payables. Against this backdrop, nickel payables rose slightly WoW, while cobalt payables moved higher.

Although the tightness in spot MHP brought supplementary demand for high-grade nickel matte as a raw material, the limited availability of spot high-grade nickel matte in the market led to sluggish trading activity.

MHP cost side, the price of key auxiliary material sulfur continued to climb. Due to restricted sulfur production in Russia, spot sulfur availability was limited. Combined with stockpiling for Indonesian MHP projects and global phosphate fertiliser demand, traders' bargaining power strengthened significantly. Amid tight spot resources, the market focused on the situation after winter phosphate fertiliser demand declines. Sulfur prices are expected to have further upside room.

The primary nickel market faced oversupply, with LME nickel inventory buildup, but positive factors on the macro front, such as interest rate cut expectations and trade easing, supported a slight WoW increase in LME nickel prices this week. Considering the reasons for the rise in payables, prices for MHP and high-grade nickel matte showed an overall synchronized upward trend this week.