[SMM Analysis] Nickel Intermediate Product Prices Rose This Week, Focus on February MHP Quotations and Sulfur Tender Finalization

This week, MHP market payables hovered at highs, with attention on February price indications. Supply side, although new projects commenced production in Q1, it will take time for material to flow into the spot market, and current circulating volumes are limited. Meanwhile, policy disruptions in Indonesia persist, with the market focused on expectations of a potential reduction in nickel ore quotas for 2026, and news of plans to include cobalt in the ore pricing system. Demand side, the cancellation of the new energy export tax rebate policy in April spurred an installation rush demand from precursor plants, coupled with the economic advantage of refined nickel brought by high nickel prices, leading to active downstream inquiries but limited concluded transactions. For cobalt, the pilot cobalt intermediate product export project in the DRC advanced, but shipments still face waiting times for vessel schedules after export dispatch. MHP remains an important supplementary raw material for cobalt intermediates, and cobalt payables maintained high levels. Overall, nickel payables and cobalt payables held steady at high levels this week. The market will focus on price indications from major producers in February, and an anticipated loosening of supply may lead to a decrease in nickel payables.

The high-grade nickel matte market also showed a tight supply situation, with payables remaining high. Market transactions were sluggish, presenting a "weak supply-demand" pattern.

For key auxiliary material sulphur, sulphur prices (CIF Indonesia) were flat WoW. The market was in a stalemate, awaiting guidance from Indonesian tender results. The current tight supply situation remains the primary support. Since January, reduced availability due to maintenance at international facilities and delayed vessel schedules have intensified market tension. However, downstream smelters showed strong resistance to the persistently high prices, widely adopting just-in-time procurement strategies.

Nickel prices generally fluctuated at highs this week. Current support mainly stems from potential disruptions related to Indonesian supply policies. The nickel market remains in a fierce battle between "strong expectations for Indonesian policies" and the reality of "high inventory and weak demand." Overall, nickel prices rose MoM this week. Considering payables, nickel prices for MHP and high-grade nickel matte increased, and cobalt prices for MHP also rose.