[SMM Analysis] MHP and High-Grade Nickel Matte Nickel Prices Rose WoW, Market Activity Increased

This week in the MHP market, demand side, the recent MoM rise in nickel prices provided profit margins for refined nickel, prompting some refined nickel plants to inquire and restock, with enterprise raw material purchase demand gradually releasing. However, nickel salt smelters had partially stockpiled in Q1, resulting in low purchase willingness, and they mainly adopted a wait-and-see attitude. Supply side, limited spot market circulation supported high and flat nickel payables and cobalt payables in MHP. Price-wise, nickel payables and cobalt payables remained stable this week.

The supply-demand pattern for high-grade nickel matte remained tight, but market acceptance of high payables was low, leading to few transactions. The high-grade nickel matte payable indicator is expected to stay high.

For key auxiliary material sulfur, prices rose this week. Mainstream Middle Eastern supply prices remained firm, with Qatar, UAE, and Kuwait successively announcing January FOB prices of $517/mt, $520/mt, and $516/mt, respectively. Additionally, market news indicated a winning bid price of 545-550 $/mt from Formosa Plastics. On supply, OPEC+ will implement its plan to pause crude oil production increases in Q1. As sulfur is a by-product of oil and gas processing, market expectations point to a decline in global sulfur production in January, suggesting further upside room for sulfur prices in January.

Regarding nickel prices, they fluctuated between "expectations of supply contraction due to tightening Indonesian policies" and "the reality of high inventory and weak demand," correcting after a significant rise. Overall, nickel prices increased MoM this week. Combined with payables, nickel prices for MHP and high-grade nickel matte rose, and cobalt prices for MHP also increased.