July 3 Morning Meeting Minutes
Market Hot Topics:
Indonesia's Ministry of Energy and Mineral Resources (ESDM) has officially released the Nickel Ore Benchmark Price (HMA) for the first half of July 2026. The HMA for the first half of July is: nickel price at $17,593.33/mt (compared to $18,642.33/mt in the second half of June 2026), down $1,049.00, a decline of 5.63%; cobalt price at $55,854.00/mt; iron ore price at $1.51/mt; chrome ore price at $6.37/mt.
Based on SMM's internal calculation model, simulated calculations were performed for saprolite ore (iron content 20%, chromium 1%, cobalt 0.05%) and limonite ore (iron content 45%, chromium 2%, cobalt 0.10%).
The HPM benchmark price changes for each nickel ore grade are as follows:
Ni 1.2%: $47.40/wmt (down $2.13)
Ni 1.3%: $51.86/wmt (down $2.39)
Ni 1.4%: $56.58/wmt (down $2.95)
Ni 1.5%: $61.49/wmt (down $3.24)
Ni 1.6%: $66.64/wmt (down $3.55)
Macro:
(1) The US ADP employment increased by 98,000 in June, the smallest gain since March, below market expectations of an increase of 118,000.
(2) New Fed Chair Warsh reiterated his inclination to shrink the central bank's balance sheet on Wednesday (July 1), but also stressed that any related actions would only be implemented after thorough public communication and preparation.
Spot Market:
On July 2, SMM #1 refined nickel price rose 1,050 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 2,150 yuan/mt, up 200 yuan/mt from the previous trading day, while domestic mainstream brand electrodeposited nickel ranged from -400 to 400 yuan/mt.
Futures Market:
The most-traded SHFE nickel contract (2609) moved sideways in the morning session, closing at 125,880 yuan/mt by the morning break, down 0.41%.
A stronger US dollar and a shift in market expectations toward a "hawkish" Fed policy have kept the macro environment challenging. The market is focused on this week's US ADP and non-farm payrolls data. Near-term nickel prices are expected to be in the doldrums within the range of 125,000-135,000 yuan/mt.
Nickel Sulphate
On July 2, the average price of SMM battery-grade nickel sulphate edged lower.
Cost side, rate hike expectations continued to suppress the non-ferrous metals market, and combined with inventory buildup pressure, nickel prices have been in the doldrums recently, causing a sharp decline in spot production costs for nickel sulphate. Supply side, the tight supply of intermediate products remained unchanged, with MHP payables and auxiliary material prices such as sulphuric acid still high. Nickel salt smelters held their quotes firm, but some enterprises released low-cost inventory. Demand side, as nickel prices had not yet stabilized and some downstream enterprises had accumulated some inventory, downstream stockpiling sentiment was weak, and acceptance of nickel salt prices was relatively low. Today, the upstream nickel salt smelter’s Willingness to Sell Sentiment Factor stood at 1.8, the downstream precursor plant’s purchasing sentiment factor at 2.5, and the integrated enterprise sentiment factor at 2.4 (historical data can be queried by logging into the database).
Looking ahead, the July stockpiling period is expected to shift to the latter half of the month. Watch the impact of nickel prices and intermediate products on cost support.
NPI
On July 2, the SMM high-grade NPI market sentiment factor was 2.01, down 0.02 MoM. The upstream sentiment factor for high-grade NPI was 2.29, down 0.03 MoM, and the downstream sentiment factor was 1.72, down 0.02 MoM. Currently, market expectations for a downturn are clear, with the overall market under pressure. Suppliers’ quotations began to loosen, and the decline in high-grade nickel products was more pronounced. However, quotation divergence among market participants intensified, with some suppliers still holding prices firm and maintaining strong sentiment. On the purchasing side, a wait-and-see sentiment remained strong, with weak willingness to purchase. Expectations of price cuts by steel mills continued to heat up. Overall trading was sluggish, with only a small number of sporadic small orders circulating, and the market lacked concentrated transaction guidance. On balance, the market’s weak structure is established, with suppliers’ ability to hold prices continuing to erode and downstream purchasing demand remaining subdued. In the short term, the market will maintain a weak consolidation pattern characterized by a deadlock and sluggish transactions.
Stainless Steel
According to SMM on July 2, the SS futures market displayed an overall pattern of volatile decline. Dragged by SHFE nickel’s consecutive declines, SS futures prices remained under pressure, but the support at the 14,500 yuan/mt level held firm. As of the midday close, the most-traded SS futures contract closed at 14,545 yuan/mt. In the spot market, dragged by the decline in SS futures, trading sentiment in the stainless steel spot market weakened further. Traders increasingly offered discounts to sell, leading to widespread lower quotations. However, amid the off-season for consumption and a strong cautious wait-and-see sentiment among market participants, overall transactions remained persistently weak.
SS Most-Traded Futures Contract. At 10:15 a.m., SS2608 was quoted at 14,580 yuan/mt, up 30 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 390-940 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was flat. For cold-rolled uncut edge 304/2B coil, the average price in Wuxi fell 50 yuan/mt, and in Foshan also fell 50 yuan/mt. The price of cold-rolled 316L/2B coil in Wuxi rose 50 yuan/mt. The quotation for hot-rolled 316L/NO.1 coil in Wuxi was flat. Cold-rolled 430/2B coils in both Wuxi and Foshan were flat.
This week, stainless steel futures and spot markets consolidated weakly. Overseas macro headwinds, combined with industrial sentiment disturbances, fueled market pessimism, and off-season fundamentals were fully evident. Overall, the market exhibited a pattern of macro pressure on futures, weakening off-season demand, traders lowering prices to reduce inventory, supply contraction underpinning stockpiles, and shrinking steel mill profits. Futures were dragged lower by monetary policy and raw material rumors, while spot prices held resilience supported by steel mills holding prices firm, but end-user transactions were sluggish, and the overall market was bearish. On the futures side, macro headwinds dominated the trend this week. The easing of US-Iran tensions slightly boosted risk appetite, but the US Fed’s hawkish stance lifted rate hike expectations, weighing on the overall valuation of the nonferrous metals sector. Mid-week, rumors of expanded nickel ore quotas in Indonesia surfaced. Although subsequently officially denied, market pessimism had already spread, prompting capital to flee for safety and dragging SS futures further down. In spot and inventory, spot-futures divergence was pronounced this week, with spot resilience stronger than the futures market. Mainstream steel mills showed a strong willingness to hold prices firm, effectively defending the price floor. However, the market entered the traditional consumption off-season, end-user rigid demand continued to weaken, and the decline in futures dragged on market confidence, leading to strong wait-and-see sentiment among end-users and sluggish transactions on the floor. Traders had a strong desire to reduce inventory, leading to frequent low-price offers. Meanwhile, steel mill maintenance and production cuts materialized, supply marginally contracted, offsetting off-season demand pressure. This week, social inventory remained broadly stable with no significant fluctuations. On the cost and profit side, finished product and raw material trends diverged this week, and steel mill profits continued to narrow. Stainless steel spot prices pulled back along with the futures market, with the price center shifting lower. However, high-grade NPI supply tightness is expected to persist, keeping prices resistant to declines with limited downside, and raw material costs remained rigid. The decline in finished products combined with firm costs directly squeezed smelting profits, further increasing industry-wide profitability pressure. Overall, this week the market was dominated by macro headwinds, with weak off-season rigid demand as the core fundamental constraint. Steel mill price support and supply contraction provided a floor for spot and inventory, but could not reverse the weak trend. High-grade NPI cost rigidity continues to pressure steel mill profits. In the short term, the futures market remains subject to disturbances from US Fed policy and Indonesian nickel news, and the weak off-season supply-demand pattern is hard to change. Key areas to monitor going forward include rate hike expectations, SS futures fluctuations, downstream rigid demand, steel mill maintenance progress, and nickel raw material price trends.
Nickel ore:
Philippine market:
CIF China offers declined across the board (1.3% at $48–49, 1.4% at $56–57, 1.5% at $64–65, 1.8% at $91–94/wmt); CIF Indonesia offers were flat (1.3% at $45–46; 1.4% at $55–56), largely aligning with smelter tender prices. Freight rates eased significantly this week: Surigao–Lianyungang at around $13.75/wmt, Surigao–Indonesia at around $11.5/wmt, with overall freight down about $1.5/wmt WoW, markedly relieving the previously “staying high” freight situation. Coupled with rainy season disruptions to shipments but high port inventories and weak restocking willingness, CIF China transaction prices are expected to decline in tandem with Indonesian procurement prices. FOB prices also fell, with 1.3% grade quoted at $34–36/wmt, 1.4% at $42–44/wmt, and 1.8% at $76–78/wmt, confirming the earlier view that FOB would follow CIF lower. Supply side, Zambales and Northern Luzon production areas officially entered the rainy season. Mine road deterioration hindered shipments and kept outbound volumes low, but inventories at Chinese ports were already high, so weather disruptions provided very limited support to prices. Cost side, international oil prices pulled back slightly, easing mining and transport costs, but spot freight rates stayed high, with any softening yet to materialize. Demand side, smelters in both China and Indonesia held high inventories, near-term restocking interest was weak, the buyer-dominated pattern remained unchanged, and transactions were sluggish. As of June 26, Philippine nickel ore inventories at Chinese ports were about 6.44 million wmt (about 51,000 mt in nickel metal content), extending the supply surplus. Overall, CIF prices of nickel ore shipments from the Philippines to Indonesia and China still have downside room, and FOB prices are expected to pull back in tandem.
Indonesia market:
HMA pulled back slightly. Ample inventories, scarcity of high-grade ore, and unresolved DKIN construction and RKAB quota issues dragged on ore price expectations. Indonesia’s Ministry of Energy and Mineral Resources released the HMA nickel reference price for the second half of June at $18,642.33/dmt, slightly lower than the first half of June ($18,799.29/dmt). The calculated HPM theoretical price for Ni 1.6% saprolite ore was about $69.9/wmt, and that for Ni 1.2% limonite ore about $49.3/wmt. The premium for 1.6% remained stable, with 1.4% at about +$2 to +$5/wmt, and 1.5% and 1.6% at about +$3 to +$8/wmt.
Weather-wise, the rainy season impact in Sulawesi production areas remained relatively mild in some regions, with overall shipments limitedly affected. However, weather conditions in the Halmahera and Obi Island production areas were generally more severe, with persistent heavy rainfall and deteriorating sea conditions already imposing some restrictions on mine production. Despite shipment disruptions, smelters’ overall inventory levels remained relatively ample, limiting the near-term impact on procurement pace. Meanwhile, smelters’ requirement for nickel ore grades continued to rise. Low-grade ore (1.3–1.4%) supply has been largely offset by feed from the Philippines, and several smelters are actively seeking high-grade ore (≥1.45%). However, domestic supply of high-grade ore in Indonesia remained scarce, with circulating grades concentrated in the 1.45–1.50% Ni range, intensifying procurement competition. Spot transaction prices for limonite ore (1.2%) remained stable this week, with smelters maintaining low purchases and generally unwilling to transact at HPM theoretical prices; the discount remained deep, and low HPAL operating rates continued to suppress procurement prices.
Policy: Indonesia's Ministry of Industry plans to establish the National Industrial Estate Committee (DKIN), chaired by President Prabowo, with Vice President Gibran as deputy chairman and Minister of Industry Agus Gumiwang as daily chairman, to coordinate industrial estate policies; the establishment date is yet to be determined. Previously, KSPSI had indicated that the government would announce the 2026 RKAB quota policy on June 30 to address the risk of some enterprises seeing their quotas cut by 70%–80% and around 18,000 workers at IWIP facing layoffs. However, according to SMM, the meeting on that day actually focused on ensuring coal and power supply, with nickel ore quotas only explained in terms of the application process, and no new quotas or major decisions were made. Total quotas remain to be determined on a case-by-case basis, and the outlook is unclear.
Market Outlook · Watchful Bearish: Driven by increased smelter inventories, the transmission of lower Philippine nickel ore prices, combined with supply disruptions in Halmahera and Obi, and smelters’ structural shift to high-grade ore sources, the theoretical HPM price next month is expected to decline by about $3–4/wmt, and premiums will narrow by about $1–2/wmt. The unresolved RKAB quota policy remains a key uncertainty for supply in the medium term.
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