8.11 Morning Meeting Notes
Market Hot Topics:
On August 10, Indonesia announced that after resolving controversies related to rare earth elements (LTJ), nearly 400,000 mt of mineral products (including nickel products) have been approved for export, and over 100 vessels have resumed operations. Head of the Presidential Staff Office Dudung Abdurachman stated: "The export obstacle caused by differing interpretations of LTJ-related regulations has been resolved, and shipment activities have resumed. The problem is settled, and 100 vessels are back in operation." Previously, on August 3, the Indonesian government clarified that LTJ export restrictions mainly target pure LTJ products, while LTJ occurring as associated elements in mineral products like nickel can still be exported. SMM believes this progress is expected to ease earlier shipment delays and reduce export regulatory uncertainty, but LTJ content standards and inspection and verification procedures still need further clarification.
Macro:
(1) Data released by the National Bureau of Statistics (NBS) showed that in July, affected by imported factors, the Consumer Price Index (CPI) edged down 0.1% MoM but rose 0.5% YoY. The core CPI, excluding food and energy prices, rose 0.3% MoM and 0.9% YoY. Overall, the CPI maintained a mild upward trend.
(2) US nonfarm payrolls unexpectedly fell by 23,000 in July on a seasonally adjusted basis, marking the first decline since February; the unemployment rate slightly fell to 4.1%, the lowest level since June 2025.
Spot Market:
On August 10, the SMM #1 refined nickel averaged 130,450 yuan/mt, up 550 yuan/mt from the previous trading day. Regarding spot premiums, Jinchuan #1 refined nickel averaged 1,300 yuan/mt, flat from the prior day, with mainstream domestic brands of electrodeposited nickel ranging from -200 to 400 yuan/mt.
Futures Market:
The most-traded SHFE nickel contract (2609) moved sideways in early trading, closing the morning session at 129,570 yuan/mt, up 0.33%.
Nickel prices are currently in a highly uncertain state, marked by wild swings in policy expectations intertwined with macro headwinds and geopolitical risks. They are expected to stay in wild swings in the short term, with the most-traded SHFE nickel contract likely ranging between 125,000-133,000 yuan/mt.
Nickel Sulphate
On August 10, SMM battery-grade nickel sulphate averaged flat.
Cost side, nickel prices rebounded somewhat amid a flurry of news about Indonesian nickel ore quotas, while spot production costs for nickel sulphate edged lower. Supply side, the tight supply pattern for intermediate products remained unchanged, with MHP payables and auxiliary material prices like sulphuric acid still at elevated levels, and some enterprises were inclined to hold prices firm amid rebounding nickel prices. Demand side, some downstream enterprises recently relied mainly on long-term contract supplies, with weak sentiment for building spot order inventories, resulting in relatively low acceptance of nickel salt prices. Today, the Willingness to Sell Sentiment Factor for upstream nickel salt smelters was 1.9, while the Purchasing Sentiment Factor for downstream precursor plants was 2.5. The sentiment factor for integrated enterprises was 2.5 (historical data can be accessed from the database).
Looking ahead, short-term spot order market activity is expected to be in the doldrums, with nickel sulphate prices under overall pressure.
NPI
August 10 news: The SMM high-grade NPI market sentiment factor stood at 1.95, flat MoM. The upstream sentiment factor for high-grade NPI was 2.06, flat MoM, while the downstream sentiment factor was 1.84, flat MoM. The market tug-of-war pattern persisted in the spot market, with offer prices from suppliers remaining at relatively high levels. Some forward ore sources saw firm transactions, but overall trading volumes were limited. Downstream buyers maintained a cautious stance, with acceptable price levels at steel mills still showing a certain price spread against supplier offers. Acceptance of high-priced cargoes was limited, overall market trading activity was moderate, and prices are likely to consolidate in the short term.
Stainless Steel
According to SMM’s August 10 report, SS futures pulled back slightly. During Friday’s night session, SS weakened, but after the opening on Monday, it largely maintained a stable consolidation pattern. By the close, the most-traded SS contract settled at 14,615 yuan/mt. Spot market side, fluctuations in SS futures were limited, and traders’ spot offers remained largely stable. However, with demand still in the off-season and impacts from typhoon weather, transactions stayed sluggish.
The most-traded SS futures contract. As of 10:15 a.m., SS2610 was at 14,655 yuan/mt, up 85 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 315-665 yuan/mt. In the spot market, the average price of Wuxi cold-rolled 201/2B coil was stable; the average price of cold-rolled uncut edge 304/2B coil was flat in Wuxi and flat in Foshan; cold-rolled 316L/2B coil prices in Wuxi were flat; hot-rolled 316L/NO.1 coil offers in Wuxi were flat; and cold-rolled 430/2B coil prices in both Wuxi and Foshan were flat.
This week, stainless steel futures were roiled by both industry news and capital flows, showing an overall pattern of wild swings amid a fierce tug-of-war between bulls and bears. During the week, repeated news on the supplementary RKAB nickel ore quota in Indonesia kept disrupting market expectations, and coupled with shifts in futures capital flows, SS futures rose first before giving back gains. Mid-week, prices briefly tested the 15,100 yuan/mt mark, but as expectations for incremental nickel ore quotas grew, confidence among bulls faded, pushing futures back into the doldrums. Swinging wildly overall, market trading sentiment kept switching. The spot market showed a pattern of weak futures-driven spot movements and a basically balanced supply-demand dynamic, with prices moving sideways overall and struggling for direction. The market remains in the traditional consumption off-season, and persistent high summer temperatures continued to dampen downstream processing and construction paces, leaving terminal end-user demand release weak and overall market confidence insufficient. During the week, spot transactions only showed periodic recovery when futures strengthened; after futures pulled back, downstream purchase willingness rapidly cooled, and on-market transactions weakened again, while the end-user’s cautious wait-and-see sentiment continued to intensify. However, spot prices did not weaken significantly along with futures, as core supportive factors remain ample: first, nickel-based raw material NPI prices are firm, providing strong support to stainless steel production costs; second, mainstream steel mills are determined to hold prices firm, stabilizing the spot price center from the ex-factory end; third, current stainless steel social inventory is within a relatively reasonable range with limited destocking pressure, and supply and demand are essentially balanced. Overall, this week the stainless steel market displayed a divergent pattern in which futures consolidated on a subdued note while spot prices held firm and resisted declines. In the short term, off-season demand weakness and sluggish end-user procurement are the core headwinds restraining price rises; combined with an increase in stainless steel production in August, market destocking pressure gradually increased, leaving insufficient upward price momentum. In the medium and long term, expectations of the approaching peak season are gradually warming, and combined with strong cost support and low inventory pressure, overall market expectations are relatively bullish, while downside room for prices is similarly restricted. Going forward, the market is likely to move sideways, with the key focus being on the progress of Indonesian nickel ore quota approvals, the pace of SS futures fluctuations, the recovery of downstream off-season rigid demand, and steel mill production dynamics.
Nickel ore:
Philippines market:
Price-wise, Philippine nickel ore prices remained generally stable this week. However, as mine supply continued to increase while downstream procurement demand was relatively weak, bearish market sentiment gradually intensified. Current mainstream CIF China quotations stand at around $46/wmt for Ni 1.3% ore, $56.5/wmt for Ni 1.4% ore, and $64.5/wmt for Ni 1.5% ore, all flat WoW. Freight rates on major Philippine routes remained stable this week, with Surigao to Lianyungang at $14.5/wmt, Surigao to Ningde at $13.5/wmt, Zambales to Lianyungang at $12.75/wmt, and Zambales to Ningde at $12.25/wmt. Although freight rates were stable, downstream Chinese smelters hold relatively sufficient inventory levels, so restocking demand is limited and procurement remains cautious.
Weather-wise, conditions in the main Philippine nickel mining areas were generally favorable. Weather on Palawan and Homonhon Island was stable, with mining and loading activities largely unaffected. Zambales had the highest weather risk, with heavy rainfall, flood warnings, and strong winds potentially causing brief disruptions at some mine operations, inland transport, and port work. Overall, weather impacts were mainly concentrated in Zambales, with limited effect on total Philippine nickel ore supply and logistics.
Supply-demand and market sentiment side, the Philippine nickel ore market remained in a pattern of increasing supply and weak demand. Despite the rainy season, overall mining, transportation, and loading activities stayed stable, with only some areas possibly seeing short-term impacts from heavy rainfall. Mine shipments continued as normal, and spot supply kept increasing. On the demand side, Chinese downstream smelters held high inventory levels, with procurement still mainly based on just-in-time procurement, leading to low market trading activity.
Meanwhile, most Philippine mines maintained strong willingness to offer high prices and were reluctant to cut prices significantly during negotiations, mainly supported by rising freight and production costs. However, amid ample supply and limited demand improvement, low-grade nickel ore prices faced growing downward pressure. High-grade nickel ore prices remained relatively firm, primarily underpinned by stable procurement demand from some NPI smelters and tightening supply-demand dynamics for high-grade NPI.
Looking ahead, the Philippine nickel ore market is expected to maintain a relatively ample supply over the coming week. Mine production and export shipments are expected to remain normal, keeping market spot supply still loose. Downstream buyers are expected to continue making just-in-time procurement, with little significant improvement in overall trading activity. Against a backdrop of sufficient supply and slow demand recovery, low-grade nickel ore prices are expected to remain under pressure, with market sentiment staying cautious overall.
Indonesia market:
Price-wise, this was the first week after the August first-half HMA pricing mechanism took effect, with the HMA at $16,646/mt. With no change in HPM, Indonesia’s local nickel ore prices were generally stable. For limonite, Ni 1.2% ore CIF was around $29/wmt, and Ni 1.3% ore around $31/wmt; for saprolite ore, Ni 1.4% ore was about $52.6/wmt, and Ni 1.5% ore around $60/wmt. However, due to still ample market supply and high smelter inventories, actual local nickel ore transaction prices remained largely stable WoW. In the short term, with ample supply and cautious procurement, Indonesia’s local nickel ore prices are expected to stay stable. As new projects gradually progress, market prices may adjust based on supply-demand changes.
Weather-wise, conditions across Indonesia’s main nickel ore producing areas were generally manageable. Morowali, Konawe, and Obi Island saw limited rainfall, with relatively small impact on mining and logistics; Halmahera remained a region with heavy rainfall, where localized intense rain could cause brief disruptions to mining, transport, and port operations. Overall, the impact of weather factors on Indonesia’s nickel ore supply and logistics remained relatively limited.
Supply-demand and market sentiment side, Indonesia's local nickel ore market maintained an overall loose supply pattern. Saprolite ore inventory continued to accumulate slightly, while as some HPAL projects gradually ramped up production, limonite inventory declined somewhat, but the overall inventory level can still support about two months of production demand. Currently, the mainstream domestic transaction price for low-grade nickel ore is around $31/wmt. Due to stronger demand for high-grade ore downstream, limonite trading activity remains low, and actual transaction prices are significantly below the HPM. Meanwhile, some RKEF smelters have raised the furnace feed grade requirement to Ni 1.45%–1.50%, further curbing demand for low-grade nickel ore.
The market continues to monitor the approval status of additional RKAB quotas in Indonesia. It is reported that a large nickel miner is expected to obtain additional quotas in the tens of millions of mt in H2 2026. If officially approved by ESDM subsequently, this would further increase raw material supply for the smelting sector. Overall, against the backdrop of ample supply, high inventory, and cautious procurement, Indonesian nickel ore prices still face some downward pressure in the short term.
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