[SMM Analysis] Refined Nickel Conversion Channel Opens, Nickel Salt Prices Fall Under Pressure

Refined Nickel Conversion Channel Opens, Nickel Salt Prices Under Pressure and Decline

As of Friday this week, the SMM battery-grade nickel sulphate index stood at 27,885 yuan/mt, with the quotation range for battery-grade nickel sulphate between 27,980-28,180 yuan/mt; the average price pulled back WoW.

Demand side, transaction sentiment remained relatively weak mid-month, as some producers had accumulated certain raw material inventory, leading to relatively weak price acceptance; supply side, as the premium of nickel sulphate prices over refined nickel has significantly exceeded the theoretical processing fee, some enterprises showed a tendency to convert refined nickel into nickel sulphate, driving expectations of looser supply. Looking ahead, with the month-end procurement period approaching, improved nickel salt supply this month may put pressure on nickel salt prices.

Inventory side, the upstream nickel salt smelter inventory index held at 4.3 days this week, the downstream precursor plant inventory index dropped from 8.9 days to 8.5 days, and the integrated enterprise inventory index rose from 6.5 days to 7 days; buying/selling strength side, the upstream nickel salt smelter's Willingness to Sell Sentiment Factor fell from 1.7 to 1.6 this week, the downstream precursor plant's procurement sentiment factor held at 2.7, mid-month procurement transaction sentiment remained low, and the integrated enterprise sentiment factor held at 2.7. (Historical data available via database login.)

Nickel Prices Continued to Decline This Week, Nickel Salt Production Costs Pulled Back

Cost side, MHP raw material market circulation was tight, and the MHP payables held high this week. Nickel prices side, nickel prices were suppressed by a strong US dollar index and high inventory with weak fundamentals, continuing to decline throughout the week. Overall, nickel prices fell WoW, while MHP payables held steady, driving immediate nickel salt production costs to pull back further WoW. As of Friday this week, the profit margin using MHP was 2.8%, using crude slag was 0.3%, using nickel briquette was 2.8%, and using high-grade nickel matte was 8.4%.