[SMM Analysis] Downstream Procurement Sentiment Pulled Back, Nickel Salt Prices Slightly Declined This Week

Downstream Purchasing Sentiment Pulled Back, Nickel Salt Prices Edged Down WoW

As of Friday, the SMM battery-grade nickel sulphate index stood at 28,295 yuan/mt, with the quotation range for battery-grade nickel sulphate at 28,340-28,650 yuan/mt; the average price dropped WoW.

Demand side, the raw material procurement period passed by month-end, downstream inquiries weakened WoW. As some producers accumulated certain raw material inventory, price acceptance slightly declined. Supply side, spot nickel sulphate availability tightened slightly less MoM, but high-cost raw material cost pressure continued to support nickel sulphate quotations at high levels. Looking ahead, downstream raw material procurement demand is not expected to weaken significantly YoY, but improved nickel sulphate supply may pressure nickel sulphate prices.

Inventory side, the upstream nickel salt smelter inventory index rose from 4.1 days to 4.3 days WoW, the downstream precursor plant inventory index fell from 7.4 days to 9 days, as downstream plants replenished inventory through month-end procurement; the integrated enterprise inventory index increased from 6.5 days to 6.8 days. Willingness to sell sentiment factor for upstream nickel salt smelters held steady at 1.7, while the purchasing sentiment factor for downstream precursor plants dropped from 3.1 to 2.7. After the procurement period, transaction sentiment pulled back, and the integrated enterprise sentiment factor remained at 2.7. (Historical data available in the database.)

LME Nickel Prices Fell WoW, Nickel Sulphate Production Costs Pulled Back

Cost side, MHP raw material market availability remained tight, and the MHP payables held high WoW. Nickel prices fell further as uncertainty over US Fed interest rate cuts boosted the US dollar index. Overall, nickel prices dropped WoW, while MHP payables stabilized, leading to a WoW decline in the immediate production cost for nickel sulphate. As of Friday, the profit margins were -0.1% for MHP, 0.5% for crude slag, 0.4% for nickel briquette, and 6.3% for high-grade nickel matte.