[SMM Nickel Morning Meeting Minutes] The Trump Administration Refused to Return to the Iran Memorandum, the Most-Traded SHFE Nickel Contract Edged Down in Early Trading

8.31 Morning Meeting Minutes

Market Hot Topics:

According to the financial report filed with the exchange by Indonesian state-owned mining company PT Aneka Tambang Tbk (Antam, Indonesia Stock Exchange ticker ANTM) on August 29, 2026, the company's H1 net profit reached IDR 6.91 trillion (about $435 million), up 34% YoY; EBITDA rose 35% YoY to IDR 9.62 trillion, and operating profit rose 38% YoY to IDR 8.44 trillion. Net operating revenue increased 6% YoY to IDR 62.71 trillion, of which the domestic market contributed IDR 60.15 trillion, accounting for 96% of commercial transaction value; gold remained the main revenue source, contributing IDR 50.39 trillion, or 80% of total sales. The nickel segment grew faster: sales revenue from ferronickel and nickel ore rose 32% YoY to IDR 10.41 trillion, accounting for 17% of the company's total revenue. In terms of production, the company produced 7.78 million wmt of nickel ore, of which 6.77 million wmt was delivered to regional smelters; ferronickel production was 7,788 mt nickel metal content (TNi). Cash and cash equivalents at the end of the period stood at IDR 9.23 trillion.

Macro:

(1) US media: The Trump administration refused to return to the terms of the memorandum of understanding reached with Iran in June. The White House: No negotiations are currently underway; all options are under consideration.

(2) China's Ministry of Commerce responded to the US consideration of imposing an additional 7.5% tariff on China: the US launched Section 301 investigations against 16 economies, including China, on the grounds of "overcapacity," politicizing economic and trade issues. This is a typical unilateral and protectionist act, and China firmly opposes this.

Spot Market:

On August 28, the SMM average price for #1 refined nickel was 128,600 yuan/mt, down 850 yuan/mt from the previous trading day. In terms of spot premiums, the average premium for Jinchuan #1 refined nickel was 1,400 yuan/mt, down 150 yuan/mt from the previous trading day, while mainstream domestic brands of electrodeposited nickel ranged from -200 to 400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2610) edged down in early trading and closed the morning session at 128,200 yuan/mt, down 0.47%.

In the short term, the most-traded SHFE nickel contract is expected to trade in a range of 127,000-132,000 yuan/mt.

Nickel Sulphate

As of this Friday, the SMM average price for battery-grade nickel sulphate declined.

Demand side, with this week entering the month-end procurement period, some enterprises made stockpiling moves, but some downstream enterprises mainly picked up goods under long-term contracts; spot order stockpiling sentiment was weak, and their acceptance of nickel salt prices was low. Supply side, some upstream enterprises had relatively high inventory levels and had plans to lower operating rates and seek shipments and destocking.

Looking ahead, the market is expected to remain largely in destocking mode in the short term, with prices expected to stay under pressure overall.

Inventory side, this week the upstream nickel salt smelters' inventory index held at 8.1 days, the downstream precursor plants' inventory index declined from 10.0 days to 9.3 days, and the integrated enterprises' inventory index slipped from 9.7 days to 9.4 days; buying and selling strength, this week the upstream nickel salt smelters' Willingness to Sell Sentiment Factor held at 2.0, the downstream precursor plants' buying sentiment factor held at 2.3, and the integrated enterprises' sentiment factor held at 2.3. (Historical data can be accessed by logging into the database)

NPI

The SMM average price for 10-12% high-grade NPI fell 4.9 yuan/nickel unit WoW to 1,122.5 yuan/nickel unit (ex-factory, tax included), while the Indonesian NPI FOB index average price fell $0.4/nickel unit WoW to $145.51/nickel unit. This week, spot high-grade NPI remained in the doldrums overall, with market trading activity staying sluggish and notable divergence between upstream and downstream offer prices. Supply side, some NPI producers still intended to hold prices firm, but selling resistance for high-priced cargoes increased; low-priced resources continued to emerge in the market, forward cargo pricing turned increasingly bearish, and port inventories edged up. Premiums for cargoes with different nickel content kept narrowing, market price quotes began to diverge, and transactions were increasingly completed through average prices combined with premiums and discounts. Some traders chose to suspend quoting while awaiting clearer market direction. Demand side, stainless steel market performance remained weak. Most steel mills had relatively sufficient raw material inventories from earlier stockpiling and limited willingness to restock proactively, mainly taking a wait-and-see approach with inquiries while clearly pushing for lower prices. Traditional expectations for the “September-October peak season” were increasingly questioned by the market, and the rebound in futures failed to effectively drive concentrated downstream restocking. Overall, the industry chain lacked substantive upward drivers, market pessimism increased somewhat, and spot prices may still face pressure in the short term. Going forward, port arrivals and marginal supply-demand changes require close monitoring.

Stainless Steel

This week, stainless steel futures weakened and broke below support, with the price center continuing to shift lower. Affected by a safety incident, futures briefly rebounded, but the positive catalyst was weak; they then weakened again and broke below the 14,000 yuan/mt level, with bearish sentiment continuing to be released. The spot market weakened in tandem. As the “September-October peak season” approached, end-user advance stockpiling did not start as expected, rigid demand was weak, and transactions were sluggish. Supply-demand imbalance became prominent. Steel mills actively sold goods to draw down inventories, driving the release of supply in the distribution chain, and social inventories continued to build up. At the same time, steel mills' price-holding strategy loosened, weakening support for spot prices. Cost side, costs formed a floor; finished steel prices fell by more than raw material prices did, squeezing steel mill profits to the edge of losses and limiting the room for deep spot price declines. Overall, the market showed a tug-of-war pattern marked by a futures breakdown, peak-season disappointment, inventory buildup, and cost support. Under pressure from weak demand and inventory buildup in the short term, the weak pattern was difficult to reverse, but costs constrained downside room, and the market was likely to consolidate on a subdued note. Going forward, close attention should be paid to futures trends, the materialization of peak-season stockpiling, steel mill policies, and inventory changes.

This week, finished stainless steel prices and costs pulled back in tandem, and steel mills continued to incur losses, with profit margins for current and inventory raw materials of 304 cold-rolled at -0.37% and -0.98%, respectively. Nickel raw material side, affected by disappointing peak-season expectations, weaker futures, and higher inventories, high-grade NPI trading was sluggish and prices were in the doldrums; the tax-inclusive landed price of Indonesian NPI fell by 5.5 yuan/nickel unit to 1,126 yuan/nickel unit. Stainless steel scrap side, although scrap prices held temporarily steady thanks to cost substitution advantages, with Shanghai 304 off-cuts quoted at 10,300 yuan/mt, insufficient demand and cautious procurement by steel mills weighed on the market, weakening cost support; the short-term pattern remained subdued. Chrome raw material side, affected by a 100 yuan/mt (50% metal content) reduction in steel mills’ September procurement tender prices and by high production levels, high-carbon ferrochrome prices pulled back slightly, with mainstream quotations in Inner Mongolia falling to 7,900 yuan/mt (50% metal content). Overall, with multiple bearish factors stacking up, all raw material markets were in the doldrums and market pessimism intensified.

Nickel ore:

Philippine market:

Price side, Philippine nickel ore prices were broadly stable this week, with mainstream CIF China quotes at $46/wmt for Ni 1.3%, $56.5/wmt for Ni 1.4%, and $64.5/wmt for Ni 1.5%, all unchanged WoW. Chinese downstream smelter inventories were relatively sufficient, restocking demand was limited, and procurement mainly met immediate production needs; overall spot transactions remained sluggish. High-grade ore prices were relatively firm, while low-grade ore continued to face some pressure amid ample supply and limited demand recovery.

Weather side, weather risks across major nickel ore producing areas in the Philippines diverged this week. Weather in Palawan and Homonhon Island was generally stable, with limited impact on mining, transport, and loading. Zambales remained the main weather risk area, where periodic heavy rain and strong winds could cause localized disruptions to mining, land transport, and port operations, but overall disruption was limited. Overall, this week’s weather did not significantly affect Philippine nickel ore production or exports, and Zambales’ operational risk remained higher than in other major producing areas.

Supply-demand and market sentiment side, the Philippine nickel ore market overall showed a relatively loose supply and weak demand pattern. Although it was the rainy season, mining, transportation, and port loading generally remained normal, and spot supply was relatively ample. Chinese downstream smelters have relatively sufficient inventories, with procurement still mainly just-in-time and overall trading sluggish.

Philippine miners are supported by freight and production costs; offers remain relatively firm, and miners are reluctant to lower prices significantly; however, with supply relatively loose and limited demand recovery, downward pressure on low-grade nickel ore is gradually increasing. In contrast, high-grade nickel ore prices remain relatively firm, mainly supported by stable procurement demand from NPI smelters and relatively tight supply of high-grade NPI raw materials.

Looking ahead, Philippine nickel ore supply and exports are expected to remain normal in the coming week, with the market still relatively well supplied. Chinese downstream buyers are expected to continue to procure mainly on a just-in-time basis, with only limited improvement in overall trading. With supply relatively loose and demand recovering slowly, low-grade nickel ore prices are expected to remain under pressure, while high-grade ore prices remain relatively firm. Overall market sentiment is expected to remain cautious, and the subsequent price trend will mainly depend on the pace of restocking by Chinese downstream buyers, loading activity at Philippine ports, and spot supply conditions.

Indonesian Market:

Price side, CIF prices for Indonesian nickel ore remained stable this week, with Ni 1.4%, 1.5% and 1.6% quoted at $53.3/wmt, $60.8/wmt and $65.8/wmt, respectively. Currently, smelter raw material inventories stand at about two months' supply; restocking willingness is weak; spot trading is generally sluggish; and upward price momentum is limited.

Supply side, under the influence of El Niño climate conditions, Indonesia is currently in a relatively dry phase of the dry season. Rainfall in major nickel ore producing areas has been relatively limited, mining and shipments are largely normal, and weather-related supply disruptions have been limited. Although Halmahera and Obi Island still experience intermittent rainfall and sea-state fluctuations, these have not yet had a significant impact on overall supply. Overall, the relatively dry weather supports stable mine production and port loading.

Demand side, the market remains relatively well supplied. High-grade ore (Ni above 1.45%) faces relatively strong procurement competition because local supply is limited, and its price performance is expected to be relatively firm; Ni 1.3–1.4% ore supply is relatively ample, with some demand continuing to be supplemented by ore imported from the Philippines.

HPM side, current spot prices for limonite ore remain significantly below the theoretical HPM price, and smelter purchase willingness is insufficient. The HPM premium is expected to narrow further in September, mainly because HPAL raw material inventories are relatively sufficient and restocking demand is limited, while the dry season favors mine production and shipments, reducing supply-side disruptions. In addition, some HPAL enterprises have relatively low acceptance of high-grade HPM pricing and prefer to purchase based on actual market transaction levels. If subsequent RKAB approvals and quota releases further improve supply expectations, buyers' bargaining power may continue to strengthen, thereby further squeezing the HPM premium.

Policy side, the market remains focused on subsequent RKAB approvals and the pace of actual supply releases. APNI previously suggested 270 million wmt for the 2026 RKAB, with an additional 30 million wmt as a strategic buffer quota. If subsequent quotas continue to be released, improved supply expectations may further limit upside room for spot prices and weigh on premiums for limonite ore.

Looking ahead, Indonesian nickel ore prices are expected to remain stable-to-weak in the near term. High-grade ore is supported by supply constraints, while low-grade ore and limonite ore are pressured by ample inventory and weak demand. From September onward, the narrowing of HPM premiums is expected to become an important change in the limonite ore market. If HPAL restocking demand does not recover noticeably and RKAB supply is further released, the discount of spot prices to theoretical HPM prices may continue to widen. Going forward, the market will focus on RKAB approvals, smelter restocking pace, changes in HPM premiums, and high-grade ore supply.