[SMM analysis] Sulphate performance remained weak, nickel intermediate product payables were in the doldrums this week.

Sulphate performance remains weak. This week, nickel intermediate product payables are in the doldrums.

This week, the MHP market supply-demand pattern remains relatively loose, with nickel and cobalt payables still weak. Supply side, after sulphur arrival, some producers have resumed MHP production, and some traders have also released inventory to a certain extent recently, increasing market liquidity; demand side, downstream nickel salt and cobalt salt prices remain weak. Influenced by the price spread between SHFE and LME cobalt prices, producing cobalt sulphate is under pressure from losses, and salt plants have relatively low acceptance of high-priced MHP, putting pressure on MHP payables. Under the pattern of rising supply and weak demand, MHP payables may continue to be weak in the short term.

The high-grade nickel matte market is also in a supply-demand weak pattern. Currently, high-grade nickel matte has a clear economic advantage over MHP, but supply side, major suppliers have completed long-term contract order signing, and available spot cargoes are limited; demand side, due to downstream production line matching constraints, actual consumption capacity is insufficient. Overall purchasing sentiment is weak, trading activity is low, and payables remain stable.

Currently, the price of sulphur (CIF Indonesia) is $1,050-1,100/mt, with the average price flat compared to last Friday. The tug-of-war between sellers and buyers in the Indonesian sulphur market has intensified. MHP smelters' procurement costs are under pressure, and they generally resist high prices. Although a fertilizer plant tender resulted in high-priced transactions, with Petrokimia Gresik's 20kt granular sulphur tender settled at $1,250-1,300/mt CFR, this transaction is supported by domestic fertilizer subsidies and does not have general reference significance; actual market transaction levels have not seen a significant increase. The global tight supply pattern remains unchanged. Even though downstream demand continues to weaken, the supply gap still supports prices fluctuating at highs. It is expected that sulphur prices will continue to consolidate at highs next week.

In terms of nickel prices, nickel prices continued the consolidation pattern this week. Due to unclear quotas, it is difficult to form a clear trend. Meanwhile, with weak MHP payables, MHP nickel prices have slightly decreased, while against the backdrop of stable high-grade nickel matte payables, prices consolidate with nickel prices. In addition, MHP cobalt prices have dropped significantly due to lower cobalt prices and cobalt payables. Overall, the intermediate product market will be under pressure in the short term.