Weak Downstream Procurement Sentiment and Declining Nickel Salt Prices
As of Friday, the SMM battery-grade nickel sulphate index stood at 27,254 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,460-27,600 yuan/mt. The average price pulled back WoW.
Demand side, downstream production schedule expectations declined this month, and some producers still had accumulated raw material inventory, leading to relatively weak procurement sentiment recently. Supply side, some enterprises cut refined nickel production and shifted to selling nickel sulphate externally, driving expectations of looser supply. Combined with the fact that nickel salt spot costs weakened during the previous period of low nickel prices, nickel sulphate quotations softened. Looking ahead, after demand pulled back this month, improved nickel sulphate supply may pressure nickel sulphate prices, but attention should be paid to whether a sustained rebound in nickel prices can support nickel sulphate quotations.
Inventory side, the upstream nickel salt plant inventory index rose from 4.3 days to 4.7 days this week, while the downstream precursor plant inventory index increased from 7.9 days to 8.9 days. After minor month-end procurement, downstream inventory rose, while the integrated enterprise inventory index remained at 7 days. Buyer-seller strength side, the upstream nickel salt plant Willingness to Sell Sentiment Factor dropped from 1.9 to 1.8 this week, and the downstream precursor plant procurement sentiment factor fell from 2.9 to 2.8. Overall transaction sentiment across the upstream and downstream was weak, with the integrated enterprise sentiment factor holding at 2.7. (Historical data is available in the database.)
Nickel Prices Rebounded and Nickel Salt Production Costs Rose This Week
Cost side, MHP raw material market circulation was tight, and MHP payables remained high this week. Nickel prices side, nickel prices rebounded driven by US economic data this week. Overall for the week, nickel prices rose WoW, while MHP payables held steady, leading to a rebound in nickel salt spot production costs WoW. As of Friday, the profit margins were -0.8% for using MHP, -4.2% for using crude slag, -2.0% for using nickel briquette, and 4.3% for using high-grade nickel matte.
