[SMM Analysis] Downstream Acceptance Remained Weak, and Nickel Intermediate Product Payables Were in the Doldrums This Week

Downstream Acceptance Remains Weak, Nickel Intermediate Product Payables in the Doldrums This Week

This week, the supply-demand pattern in the MHP market remained loose, and nickel and cobalt payables remained weak. Supply side, after the strait reopened, MHP production at some producers recovered somewhat; at the same time, some traders also released a certain amount of inventory recently, and market availability increased. Demand side, downstream nickel salt and cobalt salt prices remained sluggish, cobalt sulphate production was under relatively heavy loss-making pressure, and salt producers' acceptance of high-priced MHP was relatively low, which pressured MHP payables. Given rising supply and weak demand, MHP payables may pull back in the near term.

The high-grade nickel matte market is also in a weak supply-demand pattern. Currently, high-grade nickel matte has a clear economic advantage over MHP, but on the supply side, mainstream suppliers have completed long-term contract signings, and available spot cargoes are limited; on the demand side, constrained by downstream production line compatibility, actual consumption capacity is insufficient. Overall purchasing sentiment is weak, trading activity is low, and payables remain stable.

Currently, sulphur (CIF Indonesia) prices stand at $1,050-1,100/mt, with the average price down $25/mt from last Friday. The tug-of-war between sellers and buyers in the Indonesian sulphur market has intensified; procurement costs at MHP smelters are under pressure, and they generally resist high prices, while actual market transaction levels have shifted downward. However, with global supply tight, even if downstream demand weakens sharply, sulphur prices will not plunge deeply, and downside room remains limited. Sulphur prices are expected to stay high next week.

Nickel prices continued their consolidation pattern this week. With quotas still unclear, they could hardly establish a clear trend. Meanwhile, MHP payables held steady, and MHP nickel prices were steady with a slight increase. With high-grade nickel matte payables stable, high-grade nickel matte prices consolidated along with nickel prices. In addition, MHP cobalt prices edged slightly higher on the rebound in cobalt prices. Overall, the intermediate product market will be under pressure in the near term.