[SMM Analysis] This week, the nickel intermediate product market saw low activity, with prices for MHP and high-grade nickel matte declining.

This week in the MHP market, the supply-demand pattern remained tight, but market activity was low. Demand side, due to the low economic viability of externally purchased MHP currently, nickel salt and refined nickel plants had completed their raw material procurement for December in advance, resulting in low demand urgency, with most adopting a wait-and-see attitude. Supply side, spot cargo circulation was limited, seller offers for nickel payables were flat this week, while cobalt payables saw a slight decrease. Overall transactions this week showed nickel payables for MHP were flat, and cobalt payables declined slightly.

High MHP payables provided supplementary raw material for high-grade nickel matte, with a small volume of high-grade nickel matte transactions this week, and payables remained high.

Key auxiliary material sulphur side, on December 11, to promote market stability, the China Agricultural Means of Production Circulation Association and the China Phosphate and Compound Fertilizer Industry Association, under the guidance of the National Development and Reform Commission, held a meeting and adopted multiple measures, mainly including temporarily suspending exports of domestic phosphate fertiliser before August 2026 to prioritize supply to the domestic market, and establishing stable supply and sales relationships between sulphuric acid enterprises and phosphate fertiliser enterprises, leading to a decline in domestic SHFE sulphur prices. However, the international market was strongly influenced by Middle East offers, with the latest Indonesian CIF transaction price this week exceeding $540/mt. Amid the misaligned supply-demand structure, Indonesian CIF sulphur prices are expected to have further upside room.

Nickel prices side, although the US Fed announced an interest rate cut of 25 basis points as expected, the surplus pattern in refined nickel made it difficult to fully benefit from the overall market's optimistic sentiment, and nickel prices fell MoM this week. Considering payables, nickel prices for both MHP and high-grade nickel matte declined in sync this week, while the cobalt price for MHP rose.