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3.13 Nickel Morning Meeting Minutes

Refined Nickel:

SMM March 12 News:

Spot premiums/discounts: The mainstream spot premium quotation range for Jinchuan No.1 nickel was 1,200-1,300 yuan/mt, with an average premium of 1,250 yuan/mt, down 50 yuan/mt from the previous trading day. The premium/discount quotation range for Russian nickel was -200 to 0 yuan/mt, with an average discount of -100 yuan/mt, up 50 yuan from the previous trading day.

Futures: Nickel prices rose after opening today. As of 11:30, the closing price was 132,550 yuan/mt, up 0.20% from the previous trading day's settlement price, with a high of 132,780 yuan/mt.

Spot premiums/discounts: Jinchuan brand nickel continued to decline by 50 yuan from the previous trading day. Traders chose to lower prices to promote transactions, but the results were modest, and end-users remained cautious.

From a technical and market sentiment perspective, SHFE nickel futures contracts fluctuated and rose, with sentiment still outweighing fundamentals in the short term.

Price spread with nickel sulphate: Today, nickel briquette prices were 131,200-131,500 yuan/mt, with an average price of 131,350 yuan/mt, up 300 yuan/mt from the previous trading day's spot price. Nickel sulphate remained at a discount to refined nickel.

Nickel Sulphate:

On March 12, the SMM battery-grade nickel sulphate index price was 27,332 yuan/mt, with a quotation range of 27,280-27,980 yuan/mt, and the average price rose WoW.

Cost side, LME nickel prices fluctuated at highs in the short term. Meanwhile, Congo's suspension of cobalt exports led to a sharp rise in cobalt prices, pushing up the cobalt coefficient in MHP. Additionally, MHP sellers showed strong sentiment to stand firm on quotes, and the MHP coefficient continued to rise, with some traders halting quotations. Nickel sulphate costs are expected to rise further. Demand side, last week, due to the significant rise in cobalt sulphate prices, precursor plants suspended quotations for precursors, leading to cautious raw material procurement. This slowed the procurement pace of nickel salts by precursor plants during traditional procurement periods, but demand remained. Supply side, rising raw material procurement prices strengthened nickel salt producers' sentiment to stand firm on quotes. Comprehensive analysis suggests that with market demand still present and cost increases driving nickel salt producers' sentiment, nickel salt prices are expected to rise further in the short term.

Nickel Pig Iron (NPI):

On March 12, the SMM average price for 8-12% high-grade NPI was 1,000 yuan/mtu (ex-factory, tax included), up 2.5 yuan/mtu from the previous working day. Supply side, domestically, as the Philippines' rainy season nears its end, nickel ore output remains tight, and ore prices are stable, with smelters' production drivers weak and output low. In Indonesia, some production lines in major producing areas have not significantly recovered, and ore output fell short of expectations, keeping overall output stable. Demand side, stainless steel production schedules are expected to maintain an upward trend, and rising stainless steel scrap prices weakened the economic viability of raw materials, but downstream demand for high-grade NPI remains optimistic. In the short term, strong cost support and tightening supply and demand will keep prices generally stable with a slight rise.

Stainless Steel:

On March 12, SMM survey showed that stainless steel market prices continued to rise. Futures side, the most-traded contract 2505 fluctuated around 13,490 yuan/mt in early trading, then jumped to 13,550 yuan/mt, showing a significant increase. As of 10:30, SS2505 was quoted at 13,490 yuan/mt, up 25 yuan. In Wuxi, the spot premium/discount for 304/2B was in the range of -120-200 yuan/mt. Spot market prices rose, with steel mills and traders standing firm on quotes, generally raising prices by 50-100 yuan/mt, while actual transaction prices for 300-series rose 20-50 yuan/mt. Market sentiment was bullish, with spot traders actively selling and restocking, but downstream companies remained cautious, only restocking as needed. On the day, inquiries in the Wuxi market increased, low-priced resources decreased, and merchants either held prices steady or raised them, with both 300-series and 400-series seeing price increases. In Foshan, spot prices were generally stable with a slight rise, but transactions remained sluggish. Downstream merchants lacked confidence in the rise, and with limited macro stimulus, procurement remained cautious.

Polarity remained low, and purchasing actions were slow.

Nickel Ore:

Last week, FOB prices for medium and high-grade nickel ore in the Philippines pulled back after a surge. In the low-nickel, high-iron market, as the Philippines' rainy season nears its end, mines have started offering March shipments, with current FOB transaction prices loosening compared to pre-rainy season levels. For medium and high-grade nickel ore, influenced by rising Indonesian ore prices and continuous increases in downstream nickel pig iron prices, Philippine mines maintained their sentiment to stand firm on quotes. However, limited acceptance of high-priced ore by domestic nickel pig iron plants led to a slight decline in medium-grade nickel ore tender prices during the week. Supply side: As the rainy season gradually ends in major southern mining areas, Philippine shipments are expected to increase. Demand side: Continuous rises in downstream nickel pig iron prices have brought some profit recovery, but cost losses for nickel pig iron plants persist, limiting acceptance of high-priced ore offered in previous weeks. Currently, just-in-time restocking is the main strategy. Port inventory side: Nickel ore port inventory continued to destock. Ocean freight side: Some ocean freight rates reached $11/mt. With the end of the rainy season in major southern mining areas, shifts in shipping locations may push up ocean freight rates. Overall, influenced by multiple factors, Philippine nickel ore prices may pull back after surging in previous weeks, trending weakly.

Current market transaction prices: For pyrometallurgical ore, the mainstream premium price for Indonesian nickel ore in March was $19-20/wmt in Sulawesi Island. SMM's Indonesia local laterite nickel ore 1.2% (delivery-to-factory price) ranged from $25.5-27.5/wmt, up $0.5/wmt WoW, up 1.8% MoM. SMM's Indonesia local laterite nickel ore 1.6% (delivery-to-factory price) ranged from $46.5-51.5/wmt, up $0.4/wmt WoW, up 0.9% MoM. Pyrometallurgical ore continued to rise, but the increase narrowed compared to February. Supply: In March, the rainy season in Sulawesi, Indonesia's main mining area, will gradually end, and Indonesian nickel ore supply is expected to increase. However, downstream smelters still have just-in-time procurement needs, and supply may be affected around Ramadan and Eid al-Fitr. Demand side: Mid-tier smelters have just-in-time procurement needs this month, so demand support remains. Inventory side: Mid-tier pyrometallurgical companies generally maintain less than two months of inventory, and restocking sentiment remains high in March, driving market transaction activity. Hydrometallurgical ore supply remains tight this year, with current delivery-to-factory prices for Sulawesi hydrometallurgical ore around $26/wmt. With the ramp-up and commissioning of MHP projects this year, downstream demand is expected to increase. However, with limited quotas, mines prefer to prioritize higher-margin pyrometallurgical ore, reducing hydrometallurgical ore sales, leading to faster price increases for hydrometallurgical ore recently.

Subsequent attention is needed on the impact of the HPM price for the second half of March, to be announced on the 15th, on Indonesian nickel ore prices, and the actual circulation of local ore after the rainy season ends. Additionally, the new policy issued by Indonesia's Ministry of Energy and Mineral Resources this week adjusted the HPM pricing method. Although the policy does not directly affect nickel smelters, it has disturbed market sentiment. Overall, Indonesian local ore prices are expected to remain stable with a slight rise in March, with upstream shipments expected to increase and demand still present. However, due to tight overall nickel ore supply, the absolute price of Indonesian nickel ore is expected to rise, but the pace may slow.