Asian stainless steel prices held stable for a third consecutive week, with Chinese Taiwan's export quotes unchanged and Chinese export offers rebounding to steady levels after a brief dip earlier in the month. Raw material trends diverged, LME nickel prices softened while Indonesian NPI gained ground; Chinese domestic ferronickel stabilized and stainless steel futures posted a weekly gain. Trading activity remains quiet during the traditional off-season, though consumption levels are running ahead of the same period last year. A recent Middle East peace accord helped nickel prices bounce back, pointing to a firm short-term market trend.

[SMM Nickel Express] The SMM 10-12% high-grade NPI average price rose WoW by 3.03 yuan/nickel unit to 1,146.13 yuan/nickel unit (ex-factory, tax included), and the Indonesia NPI FOB index average price rose WoW by $0.33/nickel unit to $147.66/nickel unit.

Nickel prices showed a pattern of stopping falling and stabilizing with a fluctuating rebound this week. At the start of the week, the US-Iran peace agreement became the key variable reversing market sentiment; as the geopolitical risk premium rapidly faded, market risk appetite recovered significantly. Meanwhile, the US Fed kept rates unchanged at its June FOMC meeting, in line with market expectations. Driven by the macro sentiment recovery, SHFE and LME nickel prices rose from earlier lows amid fluctuations. The most-traded SHFE nickel contract rebounded from the 135,000 yuan/mt area to near 137,000 yuan/mt, and LME nickel rallied in tandem to above $17,900/mt. This week, the SMM #1 refined nickel average price was 136,112 yuan/mt, up 450 yuan/mt WoW. Jinchuan nickel premiums stabilized at 1,300–1,500 yuan/mt, while mainstream electrodeposited nickel discounts were in the -500 to -400 yuan/mt range. Spot trading activity weakened from the previous week, as the futures price rebound and the completion of purchasing by most end-users left downstream parties largely on the sidelines. On the macro front, the most positive change this week came from the breakthrough in US-Iran relations. The US and Iran reached a peace agreement, and the Strait of Hormuz is expected to fully resume navigation in the near term, a geopolitical positive that boosted risk appetite. Some media outlets reported that the agreement would be officially signed on June 19, after which the Strait of Hormuz would fully reopen. On June 18 Beijing time, the US Fed kept the benchmark interest rate unchanged at 3.50%–3.75%, marking the fourth consecutive pause in rate cuts. The Fed held its FOMC meeting on June 16-17, and the market had previously priced in a 98.5% probability of an unchanged rate. However, the hawkish signals from this meeting cannot be ignored. The new chair, Warsh, leaned hawkish, and the dot plot showed that half of officials expected at least one rate hike this year. Inventory side, Shanghai Bonded Zone inventory was around 2,700 mt this week, building up by 1,000 mt WoW. China’s social inventory stood at about 126,000 mt, with a slight destocking of roughly 86 mt WoW. Following the US-Iran agreement, expectations of sulfur supply recovery intensified, weakening the cost-support logic. With refined nickel inventories continuing to build up both in and outside China, upside resistance for nickel prices is clear. The most-traded SHFE nickel contract is expected to trade in a core range of 130,000–138,000 yuan/mt.

This week, the MHP market was tight overall, with nickel and cobalt coefficients fluctuating at highs. On the supply side, sulfur supply shortages caused some producers to cut production, MHP supply declined, and transaction coefficients edged up slightly. On the demand side, downstream nickel salt prices weakened, the risk of losses persisted, and nickel salt smelters were relatively less accepting of high-priced MHP. However, with some recovery in downstream ternary demand, some producers had rigid purchase needs, supporting the strength of MHP nickel coefficients. Driven by tight supply-demand expectations, the market is expected to hold up well in the short term. The high-grade nickel matte market was also in a pattern of weak supply and demand. Currently, high-grade nickel matte has a clear economic advantage over MHP. However, on the supply side, mainstream suppliers have completed long-term order signing, leaving limited available spot supply. On the demand side, actual consumption capacity was insufficient due to limitations in downstream production line compatibility. Overall, purchase sentiment was weak, trading activity was low, and coefficients remained stable. The international sulfur market saw a shift in supply landscape, with geopolitical premiums gradually being cleared. The US and Iran signed and enacted a ceasefire memorandum on June 17, the Strait of Hormuz is expected to be gradually unblocked, the US has started lifting the sea blockade, and Iran will complete mine clearance within 30 days. However, many shipping enterprises have temporarily suspended the resumption of routes, making navigation recovery a gradual process. Coupled with Turkey's export ban extended to end-September and Russia's ban extended to June 30, short-term supply disruptions persist. As the strait unblocking progresses, sulfur prices are expected to gradually come under pressure and swing wildly at highs in the short term. Going forward, attention should be paid to mine clearance progress, the pace of shipping recovery, and the direction of the final agreement within 60 days. On the nickel price front, as the US-Iran reconciliation gradually progressed this week, market rate hike expectations faded, and non-ferrous metals generally rebounded. Against the backdrop of stable MHP payables and high-grade nickel matte coefficients, the absolute prices of MHP and high-grade nickel matte rebounded as nickel prices rose. Additionally, MHP cobalt prices and refined cobalt prices also rebounded. Overall, the intermediate product market is expected to hold up well in the short term. Cost side, the MHP raw material market remained tight. Under the combined influence of production cuts of intermediates caused by sulfur shortage and just-in-time procurement of ternary materials downstream, MHP payables fluctuated at highs this week. Nickel prices, the US-Iran situation released signals of reconciliation, market rate-hike expectations subsided somewhat, and the previously oversold nickel prices rebounded this week. Overall for the week, nickel prices rebounded, MHP payables held steady, and the spot cost of nickel salt production rose slightly WoW.

Mid-Month Market Transactions Sluggish, Nickel Salt Prices Slightly Declined This Week As of this Thursday, the SMM average price of battery-grade nickel sulphate declined. Demand side, with it being mid-month and approaching the mid-report period, the downstream sector primarily consumed inventory, stockpiling sentiment was weak, and acceptance of nickel salt prices was relatively low. Supply side, as MHP payables and auxiliary material prices remained high, some producers faced elevated immediate costs, and nickel salt quoted prices stayed high. Looking ahead, expectations of tight nickel sulphate raw material supply have not yet improved, and attention must be paid to the cost support strength of nickel prices and intermediate products for nickel salt prices. Inventory side, this week the upstream nickel salt smelter inventory index declined from 8.7 days to 8.5 days, the downstream precursor plant inventory index slid from 11.2 days to 10.9 days, and the integrated enterprise inventory index rose from 6.8 days to 7.0 days. In terms of buying and selling strength, this week the upstream nickel salt smelter Willingness to Sell Sentiment Factor remained at 1.8, the downstream precursor plant procurement sentiment factor remained at 2.5, and the integrated enterprise sentiment factor remained at 2.4. (Historical data can be queried in the database.) Nickel prices rebounded somewhat, and nickel salt costs recovered. From the cost side, MHP raw material market circulation was tight. Affected by the combined impact of intermediate product production cuts caused by sulphur shortages and downstream ternary just-in-time procurement, MHP payables fluctuated at highs this week. On the nickel price front, the US-Iran situation released signals of reconciliation, market expectations of interest rate hikes faded somewhat, and the previously oversold nickel prices rebounded somewhat this week. Overall, for the week, nickel prices rebounded, MHP payables remained stable, and the immediate cost of nickel salt production rose WoW.

On June 18, the average price of SMM battery-grade nickel sulphate edged down slightly.