[SMM Analysis] Nickel Prices Rose, Driving Up Immediate Costs, and Nickel Salt Prices Rebounded This Week

Nickel Prices Rose, Lifting Spot Costs; Nickel Salt Prices Rebounded This Week

As of Friday this week, the SMM battery-grade nickel sulphate index stood at 27,156 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,430-27,560 yuan/mt; the average price rose slightly WoW.

Demand side, approaching month-end, some producers started inquiries this week, but overall downstream demand entered the off-season, coupled with some producers' tendency to control inventory at year-end, the increase in price acceptance was limited. Supply side, some producers showed a strong willingness to hold prices firm due to rising spot costs driven by nickel prices. Looking ahead, demand is expected to pull back this month, continuing to pressure nickel salt prices, but attention should be paid to the impact of nickel price trends on nickel salt costs.

Inventory side, the upstream nickel salt smelter inventory index held at 4.9 days this week, while the downstream precursor plant inventory index dropped from 8.3 days to 7.9 days; downstream destocking is expected to dominate this month. The integrated enterprise inventory index remained at 7.3 days. Willingness to Sell Sentiment Factor for upstream nickel salt smelters rose from 1.8 to 1.9 this week, while the Purchasing Sentiment Factor for downstream precursor plants increased from 2.6 to 2.8; trading sentiment rebounded toward month-end. The sentiment factor for integrated enterprises held at 2.6. (Historical data available in the database.)

Nickel Prices Surged This Week, Significantly Raising Nickel Salt Production Costs

Cost side, MHP raw material market circulation was tight, and MHP payables remained high this week. Nickel prices continued to rise this week, stimulated by Indonesia's statement. Overall, nickel prices rebounded WoW, while MHP payables held steady, driving a significant WoW increase in the spot cost of nickel salt production. As of Thursday this week, the profit margins were -4.2% for using MHP, -8.5% for using crude slag, -6.8% for using nickel briquette, and 0.6% for using high-grade nickel matte.