Nickel Ore " Indonesia Officially Issues Presidential Decree Requiring Designated State-Owned Enterprises to Monopolize Strategic Resource Exports Starting This June " 1. Price Dynamics and HMA Revisions The Indonesian nickel ore price remained stable this week. The Ministry of Energy and Mineral Resources (ESDM) has officially released the Nickel Mineral Benchmark Price (HMA) for the second half of May 2026. Nickel HMA: $18,849.3/dmt (up $1047.15 or 5.88% from $17,802.14 in early May). Cobalt HMA: $55,854/dmt. Iron Ore HMA: $1.58/dmt. Chrome Ore HMA: $6.37/dmt. Current port-delivered prices for 1.6% grade pyrometallurgical ore (saprolite) stand at $77.8-80.8/wmt. In contrast, 1.2% grade hydrometallurgical ore (limonite) is priced at approximately $28-33/wm.. 2. Supply-Demand Fundamentals and Weather Impacts For pyrometallurgical ore, unseasonal, abnormally heavy rainfall in the Central and South Sulawesi regions (Morowali and surrounding mining areas) has severely disrupted land transportation and barge transshipment. A series of micro-earthquakes (reaching up to magnitude M$1.9$) that occurred near Morowali between May 17 and 18 further exacerbated this impact. The combination of highly saturated soil moisture and minor crustal tremors has significantly increased the risk of landslides and slope instability, forcing mines to slow down their extraction and heavy-truck transportation pace for safety reasons. Therefore, even though the approval rate of regulatory quotas (RKAB) has reached approximately 90%, the spot supply of high-grade ore remains tight. To cope with exorbitant costs and tight supply, smelters are actively adopting cost-reduction strategies. These include blending low-grade ores into raw materials to lower the overall grade, promoting a unified premium pricing model of "HPM + USD $7–$10/wmt," and implementing standardized benchmarks for the chemical specifications of pyrometallurgical ore (Cobalt 0.05%, Iron 20%, Chrome 1%) to eliminate additional premiums for individual ore components. Meanwhile, the hydrometallurgical nickel ore market continues to suffer a severe disconnect from official pricing. The price of low-grade hydrometallurgical ore is under severe pressure and has completely failed to follow the upward trend of the new HPM. This price depression is primarily driven by the dual contraction of smelter operating rates and immediate raw material demand, with the core trigger being a potential production cut in Mixed Hydroxide Precipitate (MHP) caused by a sulfuric acid supply shortage in May. Against a backdrop of relatively stable inventory levels, MHP refineries are leveraging this low-capacity operating environment to aggressively suppress procurement bids, causing hydrometallurgical ore prices to continue hovering at low levels. 3. SMM Internal Estimates The new pricing formula has led to increased price divergence and amplified volatility, particularly influenced by higher associated cobalt content in certain ores. SMM calculations show that the new HPM for 1.2% grade limonite is approximately $49.95, significantly higher than current market assessments. The new HPM for 1.6% grade saprolite is $70.83; the inclusion of higher cobalt content in the new formula has markedly amplified price fluctuations. While actual market transaction prices currently remain above this benchmark, the gap is steadily narrowing. 4. Regulatory Quotas (RKAB) and Market Outlook According to the ESDM, RKAB approvals for 2026 have reached approximately 90%. SMM statistics indicate that the total approved quota for Indonesian nickel ore stands at roughly 240 million wmt. The macroeconomic and policy focus of the market has recently shifted, primarily concentrating on the following two major export and contract regulatory policies: DSI's Full Takeover of the Export Mechanism: The Indonesian government has confirmed that starting January 1, 2027, DSI will fully take over the export business of coal, palm oil, and ferroalloys. This policy will facilitate a smooth transition of the export mechanism in two phases. Since ferroalloys (including ferronickel, NPI, etc.) fall within the scope of this takeover, the market is closely evaluating the impact of this transition period on the export logistics and compliance costs of Chinese-funded smelters. Crackdown on Under-Invoiced Long-Term Contracts: The Indonesian government emphasized that it will honor existing, valid long-term export contracts to maintain commercial credit. However, at the same time, the government will strictly investigate and punish long-term contracts suspected of "under-invoicing" (low-price customs declarations). It is reported that relevant Indonesian departments will soon hold consultations with major industry associations to ensure a smooth policy transition while plugging loopholes that lead to tax revenue losses from underpricing. Nickel Pig Iron " Supply-Demand Price Gap Widens; Short-Term Prices to Fluctuate within a Range " The average price of SMM 10-12% NPI average price fell by RMB 5.7 per nickel unit week-on-week to RMB 1140.3 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index dipped by USD 1.37 USD per nickel unit to an average of USD 146.52 per nickel unit. Downstream purchasing sentiment dropped even more visibly, intensifying the divide in market mindsets between buyers and sellers. On the supply side, existing NPI production cutbacks, coupled with recent disruptions from Indonesian export policy updates, have gradually tightened spot availability. Consequently, upstream producers are holding back cargo to defend their asking prices, generally keeping their offers firm. Sellers only slightly softened their quotes under the weight of weak futures markets, and their willingness to offload cargo at lower price levels remains low. This expectation of tighter market supply provides a solid floor for prices. On the demand side, pressure remains acute. The stainless steel market lacks upward momentum, forcing steel mills to adopt a highly cautious procurement stance centered strictly around hand-to-mouth restocking. Furthermore, as the price-to-performance advantage of stainless steel scrap expands, downstream buyers are pushing hard for discounts. Target buying prices remain heavily clustered between RMB 1,120 and 1,130/mtu, leaving a massive spread against upstream asking prices that makes reconciling the two sides very difficult. Market Outlook: While expectations of tightening supply will support spot prices, the weak futures market and competitive pricing from alternative raw materials will continue to cap upside gains. Accordingly, high-nickel pig iron prices are expected to exhibit a high-level, range-bound volatile trend next week.

[SMM Analysis] Raw Material Prices See Slight Correction, Stainless Steel Mill Profits Expand This week, both stainless steel production costs and prices pulled back slightly, and steel mill profits expanded accordingly. Using 304 cold-rolled as the calculation benchmark, the current raw material-based profit margin was 2.19%, while the low-level inventory raw material-based profit margin reached 3.67%. Overall industry profitability was moderate, and steel mills therefore maintained high production schedules. On the nickel-based raw material cost side, high-grade NPI prices first declined then rose this week, showing an overall slight pullback. During the week, news emerged that Indonesia planned to unify ferroalloy exports under state-owned enterprise operations. Although stainless steel scrap still held a notable cost-effectiveness advantage and steel mills had a strong desire to bargain down prices, supply uncertainty fueled a strong market sentiment to hold prices firm and hold back from selling, and prices ultimately stopped falling and stabilized. As of this Friday, mainstream high-grade NPI with a grade of 10-12% fell 4.5 yuan per nickel unit, closing at 1,140.5 yuan/nickel unit. Stainless steel scrap market, prices pulled back this week. The decline was driven by the combined impact of multiple bearish factors, including weak spot cargo performance in finished products, steel mills pushing for lower raw material prices, and downward adjustments in molten steel quotes. However, the decline was limited for the following reasons: the tight tax invoice situation was expected to ease, trading pain points were being gradually resolved, and steel mill purchase expectations rose accordingly. In addition, steel scrap held a greater cost-effectiveness advantage over NPI, and coupled with steel mills still being profitable and rigid demand remaining robust, prices were effectively supported. The overall pattern showed "weakening spot cargo, cost support, and recovering expectations," and short-term prices were expected to fluctuate in tandem with finished products, with limited downside room. As of this Friday, mainstream 30 in the Shanghai area...

[SMM Stainless Steel Scrap Market Weekly Review] Bearish Factors Converge to Weaken Stainless Steel Scrap, Cost Advantages Hold Price Floor This week, prices of 304 stainless steel scrap off-cuts in east China pulled back, with a quotation range of 10,400-10,500 yuan/mt. Off-cuts of the same specification in Foshan weakened, with a price range of 10,150-10,450 yuan/mt. From a raw material production cost analysis, the cost of producing stainless steel entirely from stainless steel scrap was approximately 14,580.48 yuan/mt, while the cost of production entirely using high-grade NPI reached 15,125.2 yuan/mt. Stainless steel scrap prices fell and pulled back this week. The stainless steel finished product spot market was overall in the doldrums, with spot prices continuously under pressure. Meanwhile, steel mills continued to push for lower prices on the alternative raw material high-grade NPI, creating an overall bearish atmosphere on the raw material side. Combined with major steel mills lowering their molten steel quotations during the week, multiple bearish factors converged to drive stainless steel scrap prices further down. The supporting factors cushioning the decline in stainless steel scrap were clearly visible: positive news emerged in the market this week that issues related to reverse invoicing and tight tax invoices might be eased, with industry transaction pain points expected to be alleviated. Steel mills' purchase demand for stainless steel scrap is expected to increase going forward. At the same time, stainless steel scrap continued to maintain favorable cost advantages over high-grade NPI. Coupled with the fact that steel mills still had profit margins on the production side, production and procurement enthusiasm was sustained, and overall rigid demand remained robust, continuously providing floor support for stainless steel scrap prices. Overall, the stainless steel scrap market this week exhibited a pattern of "weakening spot prices, cost-supported floor, and expectations of recovery...

[SMM Daily Comment: Tightening Supply Expectations Heated Up, Steel Scrap Price Decline Restrained NPI Price Gains] May 21 — The SMM high-grade NPI upstream sentiment factor was 3.12, up 0.02 MoM, and the high-grade NPI downstream sentiment factor was 2.08, down 0.04 MoM.

[SMM Stainless Steel Scrap Market Weekly Review] Weak Futures Dragged Down Stainless Steel Scrap, Cost Advantages Underpinned the Market This week, prices of 304 stainless steel scrap off-cuts in east China pulled back, with the quotation range at 10,600-10,700 yuan/mt; prices of the same-spec stainless steel scrap off-cuts in Foshan held steady, with the price range at 10,400-10,700 yuan/mt. From a raw material production cost perspective, the cost of producing stainless steel entirely from stainless steel scrap was approximately 14,821.71 yuan/mt, while the cost of production entirely using high-grade NPI reached 15,173.94 yuan/mt. Stainless steel scrap prices declined and pulled back this week. SS futures were generally in the doldrums, with futures continuously under pressure, which in turn transmitted to the spot market, driving spot stainless steel finished product prices to pull back in tandem. The alternative raw material high-grade NPI also declined simultaneously, but its own raw material fundamentals remained relatively firm, limiting the price drop. As stainless steel spot prices trended downward, steel mills still retained certain smelting profits, production willingness stayed high, and steel mill production schedules showed no reduction. Meanwhile, with the limited decline in high-grade NPI, the cost advantages of stainless steel scrap relative to high-grade NPI became more prominent during the week. Even though industry tax invoice issues persisted, they did not affect steel mills' procurement pace, and procurement demand for stainless steel scrap with better cost advantages remained solid. Overall, the stainless steel scrap market this week exhibited a pullback pattern characterized by "weak futures, resilient raw materials, and demand underpinning." Bearish futures dominated the short-term trend, but rigid demand and cost price spread advantages formed strong support. Tax invoices...

[SMM Analysis] Macro Sentiment Weighed on Futures, Stainless Steel Profits Narrowed Amid Raw Material Divergence Stainless steel production costs pulled back this week, and steel mill profits narrowed, with profit divergence driven by differing raw material inventory costs. Using 304 cold-rolled as the calculation benchmark, the profit margin based on current raw material costs was 1.87%, while the profit margin based on low-level inventory raw material costs was 4.48%. Overall industry profitability remained moderate, steel mills maintained high production schedules, and operating rates stayed stable. Nickel-based raw material costs: Nickel-based raw material prices came under pressure this week, largely driven by futures sentiment. SHFE nickel and stainless steel futures declined consecutively, pulling high-grade NPI market prices down in tandem. However, cost support in the NPI industry remained strong, with widespread firm-pricing sentiment across the market. Additionally, high-grade NPI sources with higher nickel content were scarce within the industry, resulting in structural price divergence in NPI, with prices for high-grade NPI above 12% grade remaining firm. As of this Friday, mainstream 10-12% grade high-grade NPI fell 6 yuan per nickel unit, closing at 1,145 yuan/nickel unit. Stainless steel scrap market: Stainless steel scrap prices pulled back this week. SS futures trended weaker, dragging spot prices lower in tandem. Although high-grade NPI also declined, the drop was limited, highlighting the cost advantage of stainless steel scrap. Steel mill smelting profits remained moderate, production schedules stayed high, and procurement demand remained solid. The overall picture showed "weak futures, resilient raw materials...

[SMM Stainless Steel Daily Review] Macro Disturbances Dragged SS Futures Lower; Low Inventory Pressure and Rigid Demand Supported Stainless Steel Spot Prices SMM, May 15 — SS futures continued to be in the doldrums. Non-ferrous metal futures extended the previous day's decline, and SS also fluctuated downward in tandem. As of the morning close, the most-traded SS contract was quoted at 14,825 yuan/mt. Spot market side, dragged by the persistently weak SS futures, stainless steel spot prices pulled back in tandem. However, stainless steel social inventory has been on an overall downward trend recently, and traders faced relatively small shipment pressure. Market confidence remained stable, and price declines were relatively limited. The most-traded SS contract fell and pulled back. At 10:15 AM, SS2605 was quoted at 14,890 yuan/mt, down 60 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area were in the range of 380-680 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi remained flat; for cold-rolled untrimmed 304/2B coils, the average price in Wuxi fell 100 yuan/mt, and the average price in Foshan fell 100 yuan/mt; cold-rolled 316L/2B coils in the Wuxi area held steady; hot-rolled 316L/NO.1 coils were quoted stable in Wuxi; cold-rolled 430/2B coils in both Wuxi and Foshan held steady. The stainless steel market was dragged by the weak and volatile futures, with notable downward pressure, but overall spot price declines remained limited, highlighting the divergence between futures and spot. Downstream end-users adopted a cautious wait-and-see stance due to macro uncertainties, with no concentrated restocking observed. However, rigid demand purchases remained solid, and the resilience of rigid demand provided a foundation for spot prices...

This week, stainless steel spot prices and production costs strengthened in tandem, with stainless steel mill smelting profits narrowing slightly. Taking 304 cold-rolled products as an example, based on current raw material prices, the full cost profit margin was 2.9% this week; calculated using inventory raw material costs, the profit margin reached 6.03%. Cost side for nickel-based raw materials, high-grade NPI prices continued to rise sharply this week. Driven by the strengthening of SS contracts, high-grade NPI prices surged after the Labour Day holiday. Although futures subsequently pulled back, strong price-holding willingness persisted in the market, supported by high stainless steel production schedules, robust demand, and NPI's own cost support, keeping prices firm. As of this Friday, mainstream high-grade NPI with 10-12% grade rose 16 yuan per nickel unit to close at 1,151 yuan/nickel unit. Stainless steel scrap market, stainless steel scrap prices continued to hold up well this week. Post-holiday geopolitical news drove futures to retreat after rapid rise, but stainless steel spot cargo performed firmly, coupled with high-grade NPI rising in tandem, providing strong cost support. The core driver was that steel mill profits remained moderate with high production schedules, sustaining rigid raw material demand; moreover, steel scrap still held significant cost advantages over NPI, boosting purchase willingness. Although tight tax invoices constrained trader cash flow, bullish sentiment was strong in the market, and scrap prices are expected to hold up well in the near term. As of this Friday, mainstream 304 off-cuts prices in Shanghai rose 250 yuan/mt, with the latest quote at approximately 10,850 yuan/mt. Cost side for chromium-based raw materials, high-carbon ferrochrome prices pulled back slightly overall this week. Although major stainless steel mills raised their steel tender prices for high-carbon ferrochrome in May, ferrochrome planned production remained at high levels. Additionally, south China was gradually entering the normal/rainy season, and ex-China ferrochrome producers were about to resume production, leading to relatively loose ferrochrome supply expectations. Recent ferrochrome transactions were sluggish, and chrome ore inventory reached a multi-year high, with chrome ore prices softening and ferrochrome cost support weakening, leaving prices in the doldrums. As of this Friday, mainstream high-carbon ferrochrome prices in Inner Mongolia fell 25 yuan/mt (50% metal content) WoW to close at 8,450 yuan/mt (50% metal content).

This week, prices of 304 stainless steel scrap off-cuts in east China rose, with the quotation range at 10,800-10,900 yuan/mt; the same-specification stainless steel scrap off-cuts in Foshan also strengthened, with the price range at 10,450-10,750 yuan/mt. From the perspective of raw material production costs, the current cost of producing stainless steel entirely from stainless steel scrap was approximately 15,062.94 yuan/mt, while the cost of production entirely using high-grade NPI reached 15,261.92 yuan/mt. Stainless steel scrap prices strengthened further this week. After the Labour Day holiday, SS futures surged sharply, stimulated by news of easing geopolitical tensions in the Middle East. Although futures subsequently pulled back, spot stainless steel finished products remained firm after the initial spike, highlighting spot resilience. The alternative raw material high-grade NPI also rose in tandem, driving raw material prices higher collectively, with stainless steel scrap prices rising in sync and continuing to hold up well. The core factors supporting further strengthening of stainless steel scrap prices were clearly visible: steel mills currently enjoyed healthy smelting margins with relatively high production enthusiasm, production schedules stayed high, and rigid raw material demand provided solid support. Meanwhile, although the cost advantage of stainless steel scrap over high-grade NPI narrowed somewhat, it still maintained a significant edge, continuously boosting steel mills' purchase willingness. At the industry level, while the issue of tight tax invoices persisted, imposing certain constraints on traders' payment collection, it did not dampen market sentiment, and bullish confidence in the industry remained relatively strong. Overall, the stainless steel scrap market this week exhibited a firm pattern characterized by "futures fluctuations, firm spot prices, and demand support," with various positive factors jointly driving market trends. Although the tax invoice issue existed, it did not significantly constrain the strong price momentum, and stainless steel scrap prices were expected to hold up well in the near term.

[SMM Stainless Steel Daily Review] Post-Holiday Stainless Steel Futures and Spot Retreat after Rapid Rise, Market Lacks Fundamental Support SMM, May 8: SS futures continued their downward pullback trend. SS futures dropped rapidly at the opening of the night session, then moved sideways. The downward fluctuation trend continued after the daytime session opened. As of the midday close, the most-traded SS contract was quoted at 15,520 yuan/mt. Spot market side, affected by the continuous pullback in futures, the stainless steel spot market still held confidence in the outlook, with spot quotes remaining firm. End-users mainly made just-in-time procurement, and overall transactions showed mediocre performance. The most-traded SS futures contract fell and pulled back. At 10:15 AM, SS2605 was quoted at 15,420 yuan/mt, down 290 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area were in the range of 200-400 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi rose by 100 yuan/mt; for cold-rolled trimmed-edge 304/2B coils, the Wuxi average price remained flat, while the Foshan average price rose by 50 yuan/mt; cold-rolled 316L/2B coils in the Wuxi area remained flat; for hot-rolled 316L/NO.1 coils, Wuxi quotes rose by 150 yuan/mt; cold-rolled 430/2B coils in both Wuxi and Foshan remained stable. Currently, the stainless steel market was driven by wild swings in futures, with spot quotes pulling back after a rapid rise. The short-term price increase exceeded expectations and had limited correlation with its own fundamentals. End-user acceptance was insufficient, and transactions showed phased characteristics. This week was the first week after the Labour Day holiday. Earlier, the rapid rise in futures drove the market to rush to buy amid continuous price rise and hold back amid price downturn, coupled with restocking demand due to insufficient pre-holiday stockpiling and purchases by futures-spot arbitrage institutions...