[SMM Analysis] Expectations of Tightening Indonesian Ore Policies Dominate, Nickel Prices Strengthen and Drive Up Intermediate Product Prices

This week, the tight supply pattern in the MHP market persisted. Demand side, the new energy export tax rebate cancellation 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. Supply side, the nickel payables and cobalt payables for MHP showed signs of softening this week. The main reasons are, on one hand, downstream acceptance of high-priced raw materials is limited, and procurement has become more cautious; on the other hand, some holders, needing to recoup funds, showed increased willingness to sell at discounted prices, putting pressure on the payables.

The high-grade nickel matte market continued its tight trend. Spot supply in the market was limited, and the supply-demand pattern remained tight. Supported by the high-grade nickel matte payable indicator at a high level, overall prices held firm, but transactions were sluggish.

For the key auxiliary material sulfur, prices remained stable this week, generally flat compared to last week. The market focused on the Indonesian tender situation; it is reported that the transaction price range was $550-560/mt, a result that served as a benchmark for current market sentiment. As Indonesian smelting capacity continues to be released, sulfur, being a core raw material for acid production, maintains solid long-term regional demand support.

Regarding nickel prices, Indonesia plans to significantly reduce the RKAB quota for nickel ore in 2026 to approximately 250-260 million mt. The expectation of supply tightening remains the core driver of current nickel prices. Dominated by this factor, nickel prices are more likely to rise than fall, with the price center staying at a relatively high level; nickel prices rose WoW this week. Considering the payables, nickel prices for both MHP and high-grade nickel matte increased WoW, and cobalt prices for MHP also rose.