[SMM Analysis] Cobalt salt price inversion exerted great pressure, and nickel intermediate product payables were in the doldrums this week.

Cobalt salt prices were under heavy loss pressure, and this week, nickel intermediate product payables were in the doldrums.

The MHP market's supply-demand pattern remained loose this week, with nickel and cobalt payables still weak. On the supply side, after the strait reopened, some producers restored MHP production, while some traders also released inventory to some extent recently, pushing up market availability. On the demand side, downstream nickel salt and cobalt salt prices remained sluggish; in particular, the heavy loss pressure in producing cobalt sulphate led to relatively low acceptance of high-priced MHP among salt producers, weighing on MHP payables. Under the supply-demand pattern of rising supply and weak demand, MHP payables may pull back in the near term.

The high-grade nickel matte market also saw a weak supply-demand pattern. Currently, high-grade nickel matte had clear economic advantages over MHP, but on the supply side, mainstream suppliers had completed long-term order signing, leaving limited spot availability. On the demand side, restrained by downstream production line compatibility, actual consumption capacity was insufficient. Overall purchasing sentiment was subdued, trading activity was low, and high-grade nickel matte payables remained stable.

Geopolitical premiums in the international sulphur market seesawed, and this week, sulphur (CIF Indonesia) prices fell $50/mt WoW. Although three sulphur vessels recently transited the Strait of Hormuz successfully, US-Iran negotiations remained deeply divided and Houthi attacks in the Red Sea continued, so transits have yet to normalize, leaving Middle Eastern cargo flows constrained. Additionally, Kazakhstan's indefinite ban on exports to countries other than Russia, Russia's ban extended to the end of 2026, and Turkey's ban until the end of Q3 sustained short-term supply disruptions. Sulphur prices stayed high, with possible modest downside room.

Regarding nickel prices, nickel prices extended their consolidation pattern this week, as repeated quota news made it difficult to establish a clear trend. Meanwhile, with MHP payables holding steady, MHP nickel prices consolidated; under the background of stable high-grade nickel matte payables, their prices also consolidated along with nickel prices. In addition, MHP cobalt prices fell, dragged down by the decline in cobalt payables. Overall, the intermediate product market will be under pressure in the near term.