[SMM Nickel Morning Meeting Summary] US June nonfarm payrolls added 57,000, missing expectations, and the most-traded SHFE nickel contract surged to the 128,000 yuan level in early trading before pulling back slightly.

July 6 Morning Meeting Minutes

Market Hot Topics:

Indonesia's Ministry of Energy and Mineral Resources (ESDM) has officially released the Mineral Benchmark Price (HMA) for nickel ore for the first half of July 2026. The HMA for the first half of July is: nickel price at $17,593.33/mt (compared with $18,642.33/mt for 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 estimation model, calculations were performed for saprolite ore (with Fe content 20%, Cr 1%, Co 0.05%) and limonite ore (with Fe content 45%, Cr 2%, Co 0.10%),

and the changes in the HPM benchmark prices for nickel ore by 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) US nonfarm payrolls increased by 57,000 in June, below market expectations of a 110,000 increase. The combined nonfarm payrolls for April-May were revised down by 74,000.

(2) On Friday, the US dollar was on track for its biggest weekly drop in nearly three months. US employment growth cooled sharply in June, prompting traders to scale back expectations for near-term US Fed interest rate hikes. The market now prices in a 52% chance of a rate hike at the September meeting, down from 64% in the previous session.

Spot Market:

On July 3, the price of SMM #1 refined nickel rose 1,800 yuan/mt from the previous trading day. In terms of spot premiums, Jinchuan #1 refined nickel averaged 2,250 yuan/mt, up 100 yuan/mt from the previous trading day, while the premium range for mainstream domestic brand electrodeposited nickel was -400 to 400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2609) surged to the 128,000 yuan level before pulling back slightly in early trading, ending the morning session at 127,190 yuan/mt, up 0.59%.

Weaker-than-expected US nonfarm payrolls led the market to become more cautious about the employment outlook, and expectations for US Fed interest rate hikes cooled markedly. The sharp decline in the dollar provided a catalyst for a nickel price rebound. In the short term, nickel prices are expected to be in the doldrums within the 125,000-135,000 yuan/mt range.

Nickel Sulphate

As of this Friday, the average price of SMM battery-grade nickel sulphate slipped. Demand side, on the one hand, the sharp decline in nickel prices had not shown significant relief, dampening downstream enterprises' confidence in stockpiling. On the other hand, at the mid-year reporting period in June, downstream enterprises had a strong willingness to control inventories overall, leading to inventory accumulation at some precursor enterprises. In July, stockpiling sentiment was weak, and acceptance of nickel salt prices was relatively low. Supply side, MHP payables and auxiliary material prices remained high. Some producers maintained high quotes, while others released finished product inventories. Looking ahead, expectations of tight nickel sulphate raw materials have not yet improved. Attention needs to be paid to the cost support strength of nickel prices and intermediate products on nickel salt prices. Inventory side, this week, the upstream nickel salt smelter inventory index slid from 8.2 days to 9.7 days, the downstream precursor plant inventory index rose from 9.9 days to 12.3 days, and the integrated enterprise inventory index increased from 7.0 days to 8.1 days. In terms of buying and selling strength, this week, the upstream nickel salt smelter Willingness to Sell Sentiment Factor remained at 1.8, the downstream precursor plant procurement sentiment factor remained at 2.5, and the integrated enterprise sentiment factor remained at 2.4. (Historical data can be queried by logging into the database)

NPI

The SMM 10-12% high-grade NPI average price slipped WoW by 13.3 yuan/mt Ni to 1,133.7 yuan/mt Ni (ex-factory, tax included). The Indonesia NPI FOB Index price average slipped WoW by $0.31/nickel unit to record $146.69/nickel unit. Throughout the week, the high-grade NPI market maintained a supply-demand stalemate and continuously sluggish trading, remaining in the doldrums, with prices generally under pressure. Tight spot circulation provided bottom support for quotes, and suppliers' offers remained resilient. However, substitute raw materials such as steel scrap and refined nickel had a prominent SHFE/LME price ratio advantage, continuously diverting rigid demand for NPI. Downstream steel mills aggressively pushed for lower prices, and the price spread between buyers and sellers was wide, making bulk deals difficult to conclude. Entering mid-week, the gap between supply and demand price expectations widened further. Suppliers did not actively offer discounts to sell, and there was no concentrated selling pressure in the short-term spot market. However, the continuous weakening of futures constantly eroded the cost-effectiveness of NPI, further suppressing steel mills' willingness to purchase. Most suppliers chose to suspend fixed-price quotations, and the wait-and-see sentiment heated up significantly. In the latter half of the week, the weak market logic gradually became clear, with high-nickel unit cargoes seeing more pronounced price reductions. The price spread between grades narrowed, and the high-price support for high-grade nickel cargoes gradually became ineffective. Throughout the whole week, downstream restocking demand remained weak. Steel mills slowed their procurement pace and basically had no active, centralized restocking operations. The market only had the execution of earlier existing orders and the circulation of a small number of scattered small-size orders. Without large-volume substantive orders to guide the market, the tight spot balance fundamentals could only limit the price decline, and could not reverse the core situation of sluggish demand and trading. Looking ahead to next week, amid cooling expectations for US Fed interest rate hikes, nickel prices may rebound, and NPI is expected to stop falling and stabilize, driven by nickel prices.

Stainless steel

This week, the stainless steel spot market showed a clear divergence from futures, with spot prices remaining firm thanks to steel mills holding prices firm. Although SS futures were mostly in the doldrums, weighed by macro headwinds outside China and rumors about Indonesian nickel ore policy, dampening market trading confidence, mainstream steel mills' strong willingness to hold prices firm, together with limited current social inventory pressure, effectively protected the price floor and limited spot declines. The market entered the traditional consumption off-season, with end-user rigid demand continuing to weaken, downstream wait-and-see sentiment running high, and transactions in the market sluggish; when futures weakened mid-week, traders increasingly offered discounts to sell, leading to broadly lower quotations, but no significant improvement in transactions was seen. On the supply side, some steel mills carried out maintenance and production cuts, leading to a marginal contraction in market supply, which offset demand pressure in the off-season; social inventory was basically stable, with no notable rise. On the cost and profit side, the decline in raw material prices was larger than that for finished products, driving a recovery in overall smelting profits for stainless steel mills and a marginal improvement in the industry's profit environment, providing some room for spot prices to remain firm.

This week, stainless steel prices and production costs both declined, keeping steel mill profit margins basically stable. Using 304 cold-rolled coil as the benchmark, the profit margin calculated with current raw material costs was 2.07%, while using inventory raw material costs it was 1.33%. For nickel-based raw material costs, high-grade NPI prices trended lower and pulled back. During the week, SHFE nickel and SS futures were mostly in the doldrums. Although the market generally expected high-grade NPI supply to be tight, and upstream smelters and traders consistently held their quotations firm, stainless steel mills' production schedule expectations declined, leading to weaker demand. Combined with the concurrent decline in stainless steel prices, the industry's acceptance of high-priced sources was very limited, and market transactions remained sluggish. By the weekend, high-grade NPI with a mainstream grade of 10%-12% fell by 8 yuan per nickel unit to close at 1,133 yuan/nickel unit. In the stainless steel scrap market, prices pulled back slightly this week. The weak futures trend was transmitted to the spot market, coupled with soft demand in the industry off-season and reduced steel mill production schedules, causing rigid demand to weaken further. Although steel scrap has a cost advantage over nickel pig iron, providing bottom support for prices, uncertainty over Indonesian policy kept the market in a wait-and-see stance. Under pressure from bearish fundamentals, short-term stainless steel scrap prices are expected to continue to consolidate in the doldrums. By the weekend, mainstream 304 off-cuts prices in Shanghai fell by 100 yuan/mt to around 10,400 yuan/mt.

Nickel ore:

Philippine market:

CIF China quotations generally declined this week, with 1.3% grade at $45.5–47/wmt, 1.4% at $56–57/wmt, 1.5% at $64–65/wmt, and 1.8% at $91–94/wmt; CIF Indonesia quotations were flat, with 1.3% at $45–46/wmt and 1.4% at $55–56/wmt, basically aligned with smelter tender prices. Freight rates saw a notable loosening this week: Surigao–Lianyungang was around $13.25/wmt, Surigao–Indonesia around $11/wmt, with overall freight falling about $0.5/wmt WoW, markedly alleviating the previously “stay high” freight situation. FOB prices fell in tandem, with 1.3% quoted at $33–35/wmt, 1.4% at $41.5–43.5/wmt, and 1.8% at $76–78/wmt, confirming the earlier judgment that FOB would pull back following CIF.

Supply side, Zambales and Northern Luzon production areas have officially entered the rainy season, with deteriorating mine roads hampering shipments and keeping outgoing volumes low. Weather-wise, the Philippines is forecast to see continuous rain in the first five days of the coming week, turning mainly to showers in the last two days, with weekly cumulative rainfall surging across the country. Meanwhile, a low-pressure system is forming in the eastern waters; although it is not expected to develop into a tropical depression or tropical storm, it is forecast to make landfall in the central-southern Philippines next Monday and move northwestward inland, affecting the three main islands of Luzon, Visayas, and Mindanao. In major production areas, the Manicani-Homonhon-Dinagat-Surigao belt is expected to see weekly cumulative rainfall next week more than double that of this week, with the Homonhon area forecast to be affected by swells for 2–3 days. Dinapigue’s rainfall next week is expected to be about six times this week’s level, and wave heights are forecast to reach around 1.7 meters on Wednesday and Thursday. Loading points in Palawan such as RTN, Ipilan, and Berong are all expected to have further higher rainfall next week than this week. Zambales’ cumulative rainfall next week is forecast to be about 2.5 times this week’s level. Despite ongoing weather disruptions, Chinese port inventories are already at high levels, so weather support for prices remains very limited.

Cost side, international oil prices pulled back slightly, easing cost pressures on mining and transportation, but spot freight rates stayed at relatively high levels, and the loosening has yet to fully materialize. Demand side, smelters in both China and Indonesia hold high inventories, near-term restocking appetite remains weak, the buyer-dominated landscape persists, and spot trading is sluggish. Inventory side, as of June 26, Chinese port inventories of Philippine nickel ore stood at approximately 6.44 million wmt (equivalent to about 51,000 mt in metal content), with the ample supply situation continuing.

Indonesia market:

Indonesia’s Ministry of Energy and Mineral Resources announced the HMA nickel reference price for the first half of July at $17,225.67/dmt, a sharp reduction of about 7.6% from $18,642.33/dmt in the second half of June. Based on this, the theoretical HPM price for Ni1.6% saprolite ore is around $66.6/wmt, and for Ni1.2% limonite ore around $47.4/wmt. In terms of premiums, premiums for 1.6% grade remained stable, 1.4% grade premiums stood at about $1.3/wmt, and premiums for 1.5% and 1.6% grades were around $3/wmt, with overall limited fluctuations. In terms of spot transactions, 1.2% limonite ore was quoted at about $30/wmt, and 1.5% saprolite ore at about $65/wmt, with both falling by approximately $5.5/wmt this week—a decline mainly driven by a sharp drop in the HMA benchmark price.

On the supply side, the impact of the rainy season was relatively mild in parts of Sulawesi, keeping the effect on overall shipments limited; however, weather conditions in the Halmahera and Obi Island production areas were generally more severe, with sustained heavy rainfall and deteriorating sea conditions leading to some mine production restrictions. Although shipments were disrupted, smelters’ overall inventory levels remained relatively ample, limiting the near-term impact on procurement pace. At the same time, smelters kept raising their nickel ore grade requirements: a significant volume of low-grade ore (1.3–1.4%) supply was filled by material from the Philippines, and several smelters turned actively to sourcing high-grade ore (≥1.45%). Yet, high-grade ore supply within Indonesia was still scarce, with circulating grades concentrating in the 1.45–1.50% Ni range and procurement competition intensifying. Spot transaction prices for limonite ore (1.2%) held steady this week as smelters kept purchases at low levels, were generally unwilling to trade at the theoretical HPM price, and deep discounts persisted, while subdued HPAL operating rates continued to weigh on purchase prices. On the policy front, on Thursday, June 25, Tri Winarno, Director General of Minerals and Coal, clarified that the 2026 nickel ore RKAB total quota had not yet been finalized and that the government was still reviewing enterprises’ revision applications under the official evaluation mechanism, with no specific figure set and the focus on assessing actual industry needs rather than relaxing restrictions. The RKAB revision window officially opened on July 1 and runs through July 31, with mining enterprises having initiated preparations for revision applications and intensively submitting materials for output quota adjustments; all adjustments are subject to comprehensive review.