Aug 4 Morning Meeting Minutes
Market Hot Topics:
Tropical Depression Luis is bringing heavy rainfall, strong winds, and rough sea conditions to northern Philippines (northern Luzon). The system is expected to maintain tropical depression intensity and gradually weaken into a remnant low around August 5. For the nickel industry, persistent rainfall and localized flooding may cause temporary disruptions to mining operations in some northern Philippine mine areas, while rough sea conditions could lead to delays in ore loading operations and vessel departures. We will continue to monitor the development of this tropical depression and assess its potential impact on mine production, port operations, and nickel ore shipments.
Macro:
(1) Trump stated that there is already an agreement regarding the Strait of Hormuz, and an agreement on denuclearization will also be reached, with negotiations scheduled to begin on Monday afternoon. Iranian Foreign Ministry spokesman Baghaei said that the situation in the Strait of Hormuz will not return to the pre-conflict state, and the new shipping channel agreed with Oman will be determined through mutual consultations.
(2) The People's Bank of China held its H2 2026 work meeting on August 1. The meeting emphasized the continued implementation of appropriately accommodative monetary policy.
Spot Market:
On August 3, SMM #1 refined nickel averaged 131,400 yuan/mt, down 1,200 yuan/mt from the previous trading day. For spot premiums, Jinchuan #1 refined nickel averaged 1,150 yuan/mt, down 50 yuan/mt from the previous trading day. Domestic mainstream brand electrodeposited nickel ranged from -300 to 500 yuan/mt.
Futures Market:
The most-traded SHFE nickel contract (2609) plunged in early trading, falling below 130,000 yuan/mt, and closed the morning session at 129,520 yuan/mt, down 1.91%.
US-Iran negotiations began, with the Strait of Hormuz expected to resume normal navigation, easing sulphur cost support and leading to a sharp drop in nickel prices. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 128,000-135,000 yuan/mt.
Nickel Sulphate
On August 3, SMM battery-grade nickel sulphate average price slightly declined.
Cost side, renewed news of easing in the Middle East situation led to a sharp drop in nickel prices, and immediate costs of nickel sulphate production fell. Supply side, the tight supply of intermediate products persisted, with MHP payables and auxiliary material prices such as sulphuric acid remaining high. Some nickel salt smelters had expectations for production cuts, and facing the rebound in nickel prices, some enterprises were willing to hold prices firm. Demand side, although the purchasing period had arrived, some downstream enterprises had certain long-term contract supply or inventory accumulation, so sentiment for building inventory via spot orders was weak, and their acceptance of nickel salt prices was relatively low. Today, upstream nickel salt smelters' Willingness to Sell Sentiment Factor was 1.8, downstream precursor producers' Purchasing Sentiment Factor was 2.6, and integrated enterprises' Sentiment Factor was 2.5 (historical data can be queried by logging into the database).
Looking ahead, the spot order market remained subdued in the short term, and nickel sulphate prices stayed under overall pressure.
NPI
As of August 3, SMM’s high-grade NPI market sentiment factor stood at 1.98, down 0.02 MoM, with the upstream sentiment factor at 2.04, flat MoM, and the downstream sentiment factor at 1.92, down 0.05 MoM. The high-grade NPI spot market returned to a stalemate, with overall trading sentiment cooling and growing resistance in selling. Most suppliers held their original price floors and maintained a willingness to hold prices firm, while some participants remained cautious about the sustainability of current high prices. Market views remained divided, and with steel mills yet to make large-scale purchases and nickel prices pulling back, prices struggled to show a clear unilateral trend.
Stainless Steel
According to an SMM report on August 1, SS futures showed a declining and pulling back trend. Dragged by a pullback in SHFE nickel, SS futures moved lower, with the most-traded SS futures contract closing at 14,470 yuan/mt. In the spot market, SS futures dropped markedly. Although NPI prices held up well recently, limiting fluctuations in stainless steel spot prices with cost support, market inquiries and transactions weakened further, and some agents cut prices to take orders.
The most-traded SS futures contract. At 10:15 a.m., SS2609 traded at 14,525 yuan/mt, down 185 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 445-895 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was flat; for cold-rolled 304/2B coil with uncut edge, the average price in Wuxi fell 25 yuan/mt and fell 25 yuan/mt in Foshan; cold-rolled 316L/2B coil prices in Wuxi fell 100 yuan/mt; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; cold-rolled 430/2B coil prices in both Wuxi and Foshan were flat.
This week, macro sentiment turning bearish dominated the metal market trend, and stainless steel futures consolidated on a subdued note under overall pressure. The US Fed kept rates unchanged as expected at its meeting this week, but its overall stance leaned hawkish, broadly pressuring commodity valuations and dragging the nonferrous metals sector lower. Affected by the transmission of macro headwinds, SS futures followed suit and consolidated on a subdued note, with the trading center shifting lower and an overall cautious trading atmosphere. In the spot and inventory segment, falling futures, coupled with sluggish off-season demand, kept downstream procurement cautious, yet price floors held by steel mills, cost support, and a reasonable inventory structure underpinned spot prices, creating a pattern of weak futures and steady spot prices. The market is currently in the traditional consumption off-season, where terminal rigid demand was relatively weak. Combined with the successive declines in SS futures during the week, which continued to batter market confidence, downstream end-users’ wait-and-see sentiment intensified, willingness to purchase weakened further, and overall spot transactions in the market were in the doldrums. But spot prices did not follow the sharp decline in futures. First, major stainless steel mills maintained a firm stance on holding prices, stabilizing the market quotation center from the ex-factory side; second, spot prices earlier remained relatively stable, with social inventory buildup being moderate and overall within a reasonable range, no significant inventory overhang pressure, effectively easing the downside risk for spot prices; and additionally, at month-end, steel mills initiated concentrated NPI purchases, where the marginal recovery in raw material demand pushed nickel pig iron prices higher, while the cost side provided firm support for spot stainless steel. Multiple factors collectively drove spot quotes to remain steady in the short term. Cost and profit side, this week, raw material prices edged up marginally while spot prices held steady, steel mills' smelting margins narrowed, and the industry's profitability space contracted slightly. At month-end, stainless steel mills started NPI purchasing, driving high-grade NPI prices higher and shifting the center of raw material costs upward. Meanwhile, finished product spot prices remained stable, constrained by off-season demand, and the price spread between finished products and raw materials narrowed, causing steel mills' profits to retreat under pressure at this stage. Although profitability narrowed, the industry overall remained in positive profit, with no significant loss pressure on the production side. Overall, this week, the stainless steel market exhibited a structural pattern of macro pressures weighing on futures, spot prices stabilizing on the back of costs and firm pricing, and profits contracting slightly. In the short term, spot resilience is ample, but fundamental pressures are gradually building in the longer term. Steel mills that previously halted or cut production are sequentially resuming operations, industry supply is steadily recovering, with August stainless steel production expected to rise further, and supply growth gradually being released. On the other hand, downstream off-season demand is unlikely to see a substantive recovery in the near term, and expectations of supply-demand easing are growing, imposing sustained downward pressure on subsequent stainless steel prices. In the short term, the market will maintain a divergent trend of weak futures and spot prices consolidating while holding firm. Going forward, key focuses to monitor include changes in US Fed policy expectations, the fluctuation pace of SS futures, the recovery strength of downstream off-season essential demand, the progress of steel mill production resumptions, and raw material cost fluctuations.
Nickel Ore:
Philippine Market:
Price-wise, this week, prices in the Philippine nickel ore market remained generally steady, but as mine supply continued to increase while downstream purchasing demand remained weak, market sentiment further weakened. Currently, mainstream CIF China quotes are: Ni 1.3% ore at $46/wmt, Ni 1.4% ore at $56.5/wmt, Ni 1.5% ore at $64.5/wmt, all flat from last week. This week, ocean freight rates for major Philippine routes continued to rise, with the Surigao to Lianyungang route up $0.75/wmt to $14.5/wmt, the Surigao to Ningde route up $0.75/wmt to $13.5/wmt, the Zambales to Lianyungang route up $0.5/wmt to $12.75/wmt, and the Zambales to Ningde route up $0.5/wmt to $12.25/wmt. Despite the continuing rise in ocean freight rates, downstream smelters in China still hold relatively ample inventories, limiting restocking demand, and the procurement side maintained a cautious and wait-and-see stance overall.
Weather-wise, the coming week is expected to see relatively stable overall conditions across the main nickel ore-producing areas of the Philippines, with only localized areas potentially affected by rainfall. Zambales is forecast to receive 90–130 mm of rain, and localized heavy rainfall may cause periodic disruptions to mining, onshore transportation, and port loading operations. Surigao is forecast to receive 40–70 mm of rain, with overall weather conditions remaining favorable for mine production and port shipments. Overall, weather impacts on Philippine nickel ore supply in the coming week are likely to be limited, with only brief logistical disruptions possible in localized areas.
Supply-demand and market sentiment side, the Philippine nickel ore market currently exhibited a supply-demand pattern of increasing supply but flat demand. Although the rainy season persisted, overall weather conditions were relatively favorable, posing limited impacts on mine production, transportation, and port loading. Mine shipments were carried out normally, and spot supply in the market continued to rise. Demand side, Chinese downstream smelters maintained a cautious procurement pace given high inventory levels, overall market transactions were relatively sluggish, and most deals were driven by just-in-time procurement. Meanwhile, most Philippine mines continued to hold prices firm during negotiations and were reluctant to voluntarily lower offers, mainly supported by rising ocean freight rates and cost-side factors. However, against the backdrop of persistently ample supply and no significant improvement in demand, downward pressure on low-grade nickel ore prices gradually intensified, while high-grade nickel ore prices remained relatively resilient, supported by stable procurement demand from some nickel pig iron (NPI) producers.
Market outlook, the supply-demand pattern in the Philippine nickel ore market is expected to remain relatively stable in the coming week. Mine production and export shipments are expected to stay normal, and market supply will continue to be ample. Downstream procurement will likely remain dominated by as-needed restocking, and a significant improvement in overall transactions is unlikely. With supply remaining ample and demand recovering slowly, low-grade nickel ore prices are expected to remain under pressure, while overall market sentiment stays cautious.
Indonesia Market:
Price side, this week marked the final week of the HMA execution period for the second half of July, with the HMA at $16,533.67/mt. The market will shift to the HMA pricing mechanism for the first half of August next week. Affected by the downward adjustments in the new HMA and HPM, Indonesia’s local nickel ore prices pulled back overall. For limonite ore, the CIF price for Ni 1.2% ore was approximately $29/wmt, and for Ni 1.3% ore, approximately $31/wmt. For saprolite ore, the Ni 1.4% ore was approximately $54.9/wmt, and the Ni 1.5% ore was approximately $61.2/wmt. Overall, HPMs (Benchmark Prices) for all grades showed a downtrend, but with still relatively loose market supply and ample smelter inventories, actual transaction prices of Indonesia's local nickel ore this week remained basically stable compared with last week. In the short term, against a backdrop of ample supply and cautious purchasing demand, Indonesia's domestic nickel ore prices are expected to remain weak to stable.
Weather, in the week of July 27 to August 1, weather across Indonesia's major nickel ore producing areas was relatively stable overall. Central Sulawesi, Southeast Sulawesi, and Morowali were expected to see mainly light to moderate rain, with limited impact on mining, transportation, and port shipments. Halmahera was still expected to be the region with the most concentrated rainfall, and localized heavy rain might cause brief disruptions to mine production, land transportation, and port shipments. Overall, the weather that week had limited impact on Indonesia's nickel ore supply and logistics, with only occasional transport delays in some areas.
Supply-demand and market sentiment, Indonesia's local nickel ore market maintained an overall loose supply pattern. Currently, saprolite ore inventories continue to increase mildly, while limonite ore inventories have declined somewhat as multiple HPAL projects gradually came on stream. Smelters' purchases are still mainly to meet immediate production needs, with no obvious active restocking. Mainstream transaction prices for low-grade nickel ore are around $29-31/wmt, showing a gradual pullback trend. In addition, some pyrometallurgy smelters have raised their purchasing grade requirement to Ni 1.45%–1.50%, further dampening market demand for low-grade nickel ore.
Policy dynamics, the market continues to follow the latest developments in Indonesia's export management and foreign exchange policies. The Indonesian government plans to fully implement the Strategic Minerals Single-Window Export Management System on September 1, 2026, but the nickel industry has not yet been included in the scope of implementation. The impact on the nickel ore market is expected to be limited in the short term, and further attention is needed on whether nickel products will be incorporated into the system. Additionally, under Government Regulation No. 21 of 2026, Indonesia exempts China, the US, Australia, and Canada from the stricter DHE SDA export foreign exchange retention requirements, helping to reduce the foreign exchange management burden on export enterprises, but will not change the nickel product export management system, with limited impact on the nickel ore market. On the other hand, ESDM clearly stated that naturally associated rare earth elements in mineral products, if not separated, extracted, or commercially recovered, will not change the product export classification. Currently, supporting regulations for associated rare earths are still being formulated. Due to limitations in determination standards and detection capabilities, 102 export inspection certificates (LS) have yet to be reviewed.
Market Outlook, in the coming week, the market will continue to closely monitor the progress of RKAB supplementary quota approvals. The approval results will remain a key variable influencing the pace of Indonesia's nickel ore supply in H2, and will continue to shape the supply-demand pattern and price trend in China's nickel ore market.
![[SMM Nickel Flash News] Indonesia Reaffirms Measured RKAB Relaxation, Quota Increase Still Under Review](https://imgqn.smm.cn/usercenter/qLeLR20251217171733.jpg)
