7.15 Morning Meeting Minutes
Market Hot Topics:
In the coming week, weather conditions in major nickel ore producing regions are expected to remain manageable overall. Central Sulawesi, Southeast Sulawesi (Kolaka/Konawe), and Halmahera in Indonesia are forecasted to mainly experience light to moderate rain and localized thunderstorms, with intermittent precipitation, resulting in overall limited impact on production and shipments. In the Philippines, Zambales is expected to see the most frequent and prolonged rainfall, with a relatively higher risk of localized impacts on mine production, transportation, and port operations. In contrast, Surigao in the Philippines will have less rainfall, with only scattered showers, and relatively stable weather conditions. Overall, local rainfall may lead to short-term declines in operational efficiency, but currently no widespread heavy rain or extreme weather is expected to significantly impact regional mine production and shipments.
Macro:
(1) The US will blockade Iranian ports starting at 4 a.m. on July 15; Trump: Will charge a 20% fee on cargo shipments; may be responsible for managing the Strait of Hormuz in the future.
(2) US Fed Governor Waller: If core inflation data again runs hot this week, the FOMC will have to consider tightening monetary policy in the near term.
Spot Market:
On July 14, the SMM #1 refined nickel price rose by 1,200 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 2,100 yuan/mt, down 50 yuan/mt from the previous trading day, and the range for mainstream domestic electrodeposited nickel brands was between -300 and 500 yuan/mt.
Futures Market:
The most-traded SHFE nickel 2609 contract surged in the night session and then consolidated in the morning session, closing the morning at 129,250 yuan/mt, up 0.43%.
Over the weekend, renewed changes in the US-Iran conflict, with the simultaneous rise of the US dollar and crude oil weighing on metals, but Indonesia's Ministry of Energy and Mineral Resources formally announced on July 10 that it will no longer broadly raise the national nickel ore mining production quotas, with quota increases being very limited, and strict exception approval channels set only for domestic smelters facing severe raw material supply shortages. In the short term, nickel prices may rebound, with the most-traded SHFE nickel contract price expected to trade in a range of 127,000-133,000 yuan/mt.
Nickel Sulphate
On July 14, the average price of SMM battery-grade nickel sulphate remained stable. Cost side, Indonesia reiterated its control stance on nickel ore quotas, nickel prices rebounded slightly, and the spot production cost of nickel sulphate edged up. Supply side, the tight supply pattern of intermediate products remained unchanged, MHP payables and prices of auxiliary materials such as sulphuric acid stayed high, some salt plants had expectations for production cuts, while some enterprises released low-cost inventory. Demand side, as nickel prices dropped significantly MoM, combined with inventory accumulation at some downstream enterprises, downstream restocking sentiment was weak, with relatively low acceptance of nickel salt prices. Today, the upstream nickel salt smelters' Willingness to Sell Sentiment Factor was 1.8, the downstream precursor plants' purchase sentiment factor was 2.5, and the integrated enterprises' sentiment factor was 2.4 (historical data available via database).
Looking ahead, the stockpiling period in July is expected to shift to late in the month, with focus required on the impact of nickel prices and intermediate products on cost support.
NPI
July 14 – SMM's High-Grade NPI Market Sentiment Factor came in at 1.98, down 0.02 MoM. The upstream sentiment factor for high-grade NPI was 2.10, down 0.07 MoM, while the downstream sentiment factor was 1.86, up 0.03 MoM. The spot high-grade NPI market remained divided, with some suppliers raising prices slightly in certain areas, but downstream users continued to seek low-priced purchases, keeping the upstream-downstream price spread from narrowing. Spot order trading was overall mediocre, mostly based on average prices plus premiums. Short-term tightening of spot circulation and smelting cost support have increased suppliers' willingness to hold prices firm, limiting a significant drop in prices. Coupled with macro news repeatedly disturbing market sentiment and futures fluctuations, NPI prices may continue to consolidate on a subdued note within a range in the short term, with few large-volume fixed-price deals.
Stainless Steel
July 14 – SMM reports that SS futures exhibited an upward trending movement. Driven by the strength of SHFE nickel in the night session and influenced by SS's own capital flow volatility, SS futures surged quickly after the night session opened and then generally consolidated on a strong note. As of the midday close, the most-traded SS contract settled at 14,565 yuan/mt. In the spot market, boosted by SS's stop falling and strengthening, spot offers recovered losses from yesterday afternoon, reducing the availability of low-priced materials. Some traders raised their offers, but downstream end-user clients remained in a wait-and-see mood, keeping overall trading mediocre.
The most-traded SS futures contract. At 10:15 a.m., SS2608 was at 14,540 yuan/mt, up 210 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 330-730 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was unchanged; for cold-rolled uncut edge 304/2B coil, average prices in Wuxi and Foshan remained steady; cold-rolled 316L/2B coil in Wuxi stayed flat; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; and cold-rolled 430/2B coil in both Wuxi and Foshan was unchanged.
This week, increased macro and capital disruptions caused stainless steel futures to decouple and weaken independently, with the price trend significantly diverging from SHFE nickel and other nonferrous metals. During the week, shifting fund sentiment led to wild swings in SS futures, breaking through the key support level of 14,500 yuan/mt, and the overall trend center continued to shift lower, with overall market trading sentiment turning bearish. Spot and inventory side, futures broke down and continued to weigh on the spot market, with off-season fundamental bearishness intensifying. The market entered the traditional consumption off-season, where terminal end-user demand was naturally sluggish. The persistent decline in futures further eroded market confidence, leaving downstream end-users dominated by a wait-and-see sentiment and purchase willingness remaining subdued. This week, mainstream steel mills abandoned their earlier strategy of holding prices firm, proactively lowering spot guidance prices, which drove spot market quotes to pull back synchronously. Transaction volumes exhibited a pattern of periodic, impulse-like release followed by rapid cooling, with sustained rigid demand severely lacking, and overall trading returned to a sluggish pattern. Against a backdrop of weak end-user purchasing and constrained destocking, the pace of market inventory buildup accelerated notably, with social inventory accumulating, further highlighting spot fundamental pressure. Cost and profit side, finished product and raw material prices moved lower in tandem this week, and steel mill smelting profits narrowed slightly but remained positive. Affected by the pullback in spot prices and compressed profitability on finished products, mainstream steel mills lowered their raw material purchase expectations by announcing NPI procurement prices at low levels, dragging high-grade NPI market prices lower. Concurrently, stainless steel scrap purchase prices also pulled back, shifting the overall raw material cost center downward. Steel mill profits were slightly compressed MoM, but the industry as a whole did not incur losses, with production profit resilience still present. Overall, the stainless steel market this week showed a subdued pattern of futures breakdowns, spot price loosening, accelerated inventory buildup, and slightly shrinking profits. Macro capital disruptions drove the independent weakness in futures, while off-season demand softness, retreat of mill price-supporting efforts, and inventory accumulation were the core bearish factors for spot. The short-term market weakness is difficult to reverse, with futures expected to consolidate on a subdued note and spot prices likely to remain under pressure.
Nickel Ore:
Philippine Market:
This week, the Philippine nickel ore market remained generally stable, with CIF China quotes essentially flat WoW. Ni 1.3% was reported at approximately $46.25/wmt, Ni 1.4% at about $56.5/wmt, and Ni 1.5% at around $64.5/wmt, with overall trading remaining sluggish. The price spread between Ni 1.3% and Ni 1.4% ore held at around $10/wmt. According to SMM's market communication, due to the low grade of Ni 1.3% ore, the number of downstream smelters able to use it is limited, resulting in persistently low actual transactions. In contrast, Ni 1.4% ore is suitable for more Chinese NPI and some Indonesian RKEF smelters, with relatively stable purchase demand, so its price performance remained relatively firm.
Supply side, weather conditions in the main Philippine mining areas were generally stable, with production and port shipments maintained at normal levels. Only localized brief showers occurred, with limited impact on mining and vessel loading, keeping overall supply steady. Demand side, Chinese and Indonesian buyers continued to purchase as needed. Smelter inventories in Indonesia stayed high, willingness to restock remained weak, and market transactions were mainly just-in-time procurement.
Inventory side, Philippine nickel ore inventories at Chinese ports continued to accumulate. As of July 10, total nickel ore inventory at ports nationwide increased to 6.84 million wmt (about 53,700 mt in nickel metal content), up 160,000 wmt from the previous week;
against the backdrop of continuously accumulating port inventories, ample Indonesian supply and subdued LME nickel prices, Philippine nickel ore prices are expected to consolidate on a subdued note in the short term. The subsequent price trend will still largely depend on the progress of Indonesia’s RKAB approvals and changes in Indonesian ore supply.
Indonesia market:
The Indonesian nickel ore market as a whole remained in a supply-ample pattern. In the first half of July, the HMA stayed at $17,225.67/dmt, corresponding to an HPM for 1.4% saprolite ore of about $56.6/wmt and for 1.5% saprolite ore of about $61.5/wmt. The spot market was generally stable this week: the average CIF price for 1.4% ore held at $57.8/wmt, a premium of about $1.3/wmt over HPM; the average CIF price for 1.5% ore held at $64.5/wmt, a premium of about $3/wmt, both basically flat from the previous week.
For limonite ore, the average CIF price for 1.2% ore held at $29.5/wmt, and for 1.3% ore at $31.5/wmt, down $0.5/wmt from the previous week. SMM expects the HMA to decline in the second half of July to $16,533.66/dmt. Going forward, Indonesian nickel ore prices face downside room.
Although prices stagnated, market fundamentals remained loose. Smelter inventories currently can cover more than two months, and there is a supply-demand gap, limiting short-term restocking demand. Miners generally expect CIF transaction prices to carry a $3-5 premium over HPM, further prompting buyers to stay cautious. At the same time, smelters are increasingly demanding higher ore grades, with purchasing centers of gravity concentrated on ores with nickel grades of 1.45%–1.50%, which further pressures demand for lower-grade ores. Small miners have limited acceptance of current prices, and actual transactions remain concentrated among large miners. Looking ahead, the broad market consensus is that nickel ore prices will still face some downward pressure over the next 1–2 months, mainly driven by high smelter inventories and ample supply. However, if the total RKAB approvals approved by the end of Q3 fall below 300 million mt, or if the approval process continues to slow down, combined with potential supply disruptions from the rainy season in Sulawesi in Q4, ore prices could still find some support.
![[SMM Nickel Sulphate Daily Review] July 15, Market Transactions Sluggish, Nickel Salt Prices Slightly Lower.](https://imgqn.smm.cn/usercenter/sKmGT20251217171733.jpg)
![[SMM Nickel Midday Review] On July 15, nickel prices consolidated lower, US June inflation cooled significantly.](https://imgqn.smm.cn/usercenter/yaAtG20251217171733.jpg)
