The US tariff hike policy impacted nickel prices, which showed a fluctuating trend at lows after a sharp decline. [SMM Nickel Morning Meeting Summary]

4.14 Nickel Morning Meeting Minutes Refined Nickel: Last week, nickel prices experienced a sharp decline followed by fluctuations at lows. The price of SMM #1 refined nickel fluctuated between 118,750 and 124,800 yuan/mt, while the SHFE nickel futures price (2505 contract) ranged from 115,450 to 121,850 yuan/mt. On the macro front, the repeated changes in US-China tariff policies and disruptions in Indonesian nickel ore supply were the main factors affecting nickel prices. The US announced a 34% tariff hike on Chinese goods, leading to widespread market panic, followed by a rebound in market sentiment after the announcement of a 90-day tariff suspension. On the fundamental side, the rainy season in the Philippines is nearing its end, with expectations of increased nickel ore shipments, but current supply remains tight. Prices for medium and high-grade nickel ore have softened, while Indonesian nickel ore prices remain stable and strong. Tight domestic nickel ore supply has weakened production incentives for smelters, while Indonesian NPI production remains stable. On the demand side, the stainless steel sector performed weakly overall, with slow market recovery, low operating rates, and weak orders, leading to inventory buildup. It is expected that SHFE nickel prices will continue to be influenced by macro sentiment in the coming week, potentially maintaining a weak trend in the short term. Nickel Sulphate: Last week, the SMM battery-grade nickel sulphate index price was 27,951 yuan/mt, with the quotation range for battery-grade nickel sulphate at 27,920-28,500 yuan/mt, and the average price declined WoW. Supply side, the sharp decline in LME nickel prices has weakened the cost support for nickel sulphate production, leading some nickel salt producers to lower their product quotations this week. However, some producers maintained firm prices due to low finished product inventories. Demand side, precursor manufacturers have generally lowered their psychological price levels for procurement due to cost transmission. Coupled with increased market volatility, most precursor manufacturers adopted a cautious wait-and-see approach, leading to reduced market activity. Looking ahead, nickel sulphate prices are expected to decline due to weakened cost support, but the decline is likely to be limited given the tight supply-demand balance for nickel salts. Nickel Pig Iron (NPI): Last week, the average price of SMM 8-12% high-grade NPI was 1,010.9 yuan/mtu (ex-factory, tax included), down 19.35 yuan/mtu WoW. This week, high-grade NPI prices saw a significant decline. On the supply side, the rainy season in the Philippines has largely ended, with an increase in shipments, easing the nickel ore shortage for domestic smelters. However, weak profit margins have kept production low. In Indonesia, production loads at smelters gradually recovered after the Eid al-Fitr holiday, with some replenishment of raw materials. However, uncertainty over Indonesia's policy on increasing nickel ore tax rates has kept production stable in major producing areas. On the demand side, the global commodity market entered a short-term downtrend after the Qingming Festival due to the impact of Trump's "reciprocal tariff" policy. Stainless steel futures fell to multi-year lows, weakening mills' expectations for the future and leading to a cautious procurement sentiment. Some traders panicked and engaged in low-price selling, and high-grade NPI prices are expected to remain under pressure in the short term. Stainless Steel: In the first week after the Qingming Festival holiday, the impact of the US tariff hike policy quickly spread, leading to a broad decline in domestic and overseas commodity futures prices, including stainless steel futures. After ending its previous upward trend, stainless steel futures opened lower with a gap on the first trading day after the holiday and continued to weaken. Spot prices followed suit, declining in tandem. This week, the price of 304 stainless steel cold-rolled uncut edge coils has fallen by approximately 600 yuan/mt. As of last Friday, in the spot market, the price of cold-rolled 201/2B coils in Wuxi and Foshan was 8,300 yuan/mt; the average price of cold-rolled cut edge 304/2B coils was 13,150 yuan/mt in Wuxi and 13,175 yuan/mt in Foshan; the price of cold-rolled 316L/2B coils was 24,150 yuan/mt in Wuxi and 24,300 yuan/mt in Foshan; the price of hot-rolled 316L/NO.1 coils was 23,300 yuan/mt in both regions; and the price of cold-rolled 430/2B coils was 7,500 yuan/mt in both Wuxi and Foshan. Currently, the specifics of the US tariff policy remain unclear, and prices have fallen significantly due to market sentiment. However, fundamentally, the stainless steel market has not undergone any significant changes, and stainless steel mills are already facing cost-price inversion. Therefore, future stainless steel prices are expected to regain support from the cost side. Going forward, close attention should be paid to the actual implementation of the US tariff policy and its impact on the market. Nickel Ore: Last week, prices for low-Ni, high-Fe ore in the Philippines remained stable. From a supply-demand perspective, the rainy season in southern Philippines has largely ended, with expectations of increased shipments of medium-grade nickel ore from Surigao. On the demand side, after the announcement of Trump's tariff policy, nickel prices fell sharply, and domestic NPI prices declined during the week, reducing acceptance of high-priced nickel ore. From an inventory perspective, domestic NPI mills have relatively low inventories, and just-in-time procurement demand remains, but acceptance of nickel ore prices is limited. On the cost side, FOB quotations for NI1.25% nickel ore in Zambales were $32/wmt, with CIF costs remaining above $43/wmt. However, as shipments shift to Surigao, FOB prices may see a slight decline. Ocean freight rates fell slightly during the week, with rates from Surigao to Lianyungang, China, down by $10-10.5/wmt. Overall, SMM expects that due to increased supply and declining downstream NPI prices, Philippine nickel ore prices may see a slight decline in the near term. Last week, global nickel prices fell sharply, with Trump's tariff policy and PNBP policy fueling expectations of implementation. However, as nickel ore orders for the first half of April have already been signed, transaction prices remained stable this week. This week, transaction prices in the Indonesian market were: for pyrometallurgical ore, local ore with 1.6% Ni was quoted at $51-52/wmt delivered to the factory; for hydrometallurgical ore, local ore with 1.3% Ni was quoted at $25-26/wmt delivered to the factory, unchanged WoW. In April, the mainstream premium for nickel ore purchases in the Sulawesi Island park remained at $24-25, with CIF prices for hydrometallurgical ore remaining stable but weak. From a supply perspective, for pyrometallurgical ore: the rainy season in Sulawesi Island has been prolonged, with frequent rainfall during the week, affecting nickel ore mining and transportation. However, overall, rainfall in Indonesia is expected to gradually decrease from April, with expectations of increased nickel ore supply. On the demand side, downstream NPI prices were impacted by the decline in nickel prices due to Trump's tariff policy, with NPI prices falling significantly during the week, weakening support for nickel ore prices. From an inventory perspective, raw material inventories at Indonesian NPI smelters are generally low, necessitating just-in-time restocking. Coupled with expectations of increased NPI production, demand support remains. Overall, SMM expects that pyrometallurgical ore supply in Indonesia will remain tight. For hydrometallurgical ore: supply tightness was not significant during the week. On the demand side, accidents at hydrometallurgical projects in the Sulawesi Island park affected MHP demand in April. Overall, hydrometallurgical ore supply is relatively ample. On the policy front, Trump's tariff policy has impacted nickel prices, and the decline in downstream nickel product prices and compressed profit margins may eventually be transmitted to the nickel ore sector, leading to price and premium declines. However, Indonesia has again fueled expectations of PNBP policy implementation. If the policy is implemented next week, the increase in royalties will raise nickel ore sales costs, providing some support for nickel ore prices. Overall, the nickel ore market is currently mixed with both bullish and bearish factors, but the main theme of tight supply remains. Future price trends will depend on negotiations between companies and mines on "whether to lower premiums in late April" and the continuation of the rainy season in Indonesia. SMM expects that local nickel ore prices in Indonesia will remain stable in the short term, with limited downside room.

SMM

The US tariff hike policy impacted nickel prices, which showed a fluctuating trend at lows after a sharp decline. [SMM Nickel Morning Meeting Summary]

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【SMM Steel Morning Meeting Summary】Market Sentiment Remains Pessimistic, Finished Steel Prices Down Significantly MoM