[SMM Analysis] Nickel Prices Surge, Driving Up Cost Expectations; Nickel Salt Prices Rose Significantly This Week

Nickel Price Surge Lifts Cost Expectations, Nickel Salt Prices Rose Significantly This Week

As of Wednesday this week, the SMM battery-grade nickel sulphate index price was 27,605 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,830-28,000 yuan/mt; the average price rebounded noticeably WoW.

Demand side, approaching month-end, some producers started inquiries this week, but overall downstream demand entered the off-season, resulting in relatively few transactions. Supply side, driven by the sharp rise in nickel prices, cost expectations increased, leading to a strong willingness among some producers to hold prices firm. Looking ahead, nickel prices are expected to fluctuate upward, supporting rising nickel salt costs, but the subsequent nickel price trend still requires attention.

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 7.9 days to 7.1 days; downstream destocking is expected to dominate this month. The integrated enterprise inventory index decreased from 7.3 days to 7 days. Willingness to sell sentiment factor for upstream nickel salt smelters rose from 1.9 to 2.0 this week, while the purchasing sentiment factor for downstream precursor plants remained at 2.8; transaction sentiment rebounded slightly towards month-end, and the integrated enterprise sentiment factor dropped from 2.6 to 2.4. (Historical data is available in the database.)

Nickel Prices Rose Sharply This Week, Nickel Salt Production Costs Increased Significantly

Cost side, MHP raw material market circulation was tight, and MHP payables remained high this week. Nickel prices rose continuously this week, stimulated by potential adjustments to Indonesia's nickel ore policy. Overall, nickel prices increased further WoW, while MHP payables held steady, driving a significant WoW rise in the immediate production costs for nickel sulphate.