[SMM Analysis] This week, the market was sluggish, and nickel salt prices slightly declined.

Sluggish Market Activity This Week with Slight Decline in Nickel Salt Prices

As of Friday, the SMM battery-grade nickel sulphate index stood at 27,197 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,440-27,540 yuan/mt, and the average price decreased WoW.

Demand side, downstream production schedule expectations declined MoM, some producers still had accumulated raw material inventory, coupled with year-end destocking tendencies, nickel sulphate procurement sentiment remained relatively weak recently; Supply side, nickel prices rebounded from last month's lows, some producers showed willingness to hold prices firm, but due to overall weak downstream demand, price acceptance has not increased yet. Looking ahead, demand pullback is expected to continue pressuring nickel salt prices this month, but attention should be paid to whether the sustained rebound in nickel prices can provide cost support.

Inventory side, the upstream nickel salt smelter inventory index rose from 4.7 days to 4.9 days WoW, while the downstream precursor plant inventory index dropped from 8.9 days to 8.8 days, overall destocking is anticipated downstream this month, and the integrated enterprise inventory index increased from 7 days to 7.3 days; On trading strength, the upstream nickel salt smelter's willingness to sell sentiment factor held at 1.8, the downstream precursor plant's procurement sentiment factor held at 2.8, overall transaction sentiment across the supply chain stayed weak, and the integrated enterprise sentiment factor remained at 2.7. (Historical data available in the database.)

Nickel Prices Declined This Week, Nickel Salt Production Costs Decreased

Cost side, MHP raw material market circulation was tight, and MHP payables stayed high this week. Nickel prices, the US Fed interest rate cut was implemented, meeting market expectations, and nickel prices returned to being suppressed by weak fundamentals. Throughout the week, nickel prices fell WoW, while MHP payables held steady, leading to a WoW decrease in the immediate production cost for nickel sulphate. As of Friday, the profit margins were 0.9% for using MHP, -3.1% for crude slag, -0.5% for nickel briquette, and 6.1% for high-grade nickel matte.