Niken market tightens, intermediate product prices surge

The global nickel market is witnessing significant supply and demand tensions for intermediate products, pushing prices to new highs. This situation is driven by several factors, including a scarcity of spot supply and increased demand from downstream manufacturers.

According to reports from market analysts, some traders in the spot Mixed Hydroxide Precipitate (MHP) market have temporarily halted quoting prices as their inventory supply has been exhausted. This phenomenon stems from two main reasons:

First, there’s a continued shortage of MHP supply on the market, while downstream businesses, especially in the battery industry, are announcing large purchase demands.

Second, the low inventory levels of traders have led some to “opportunistically” increase their payability indexes to benefit from the supply-demand imbalance.

“The scarcity of spot MHP supply is creating a seller’s market,” said John Smith, a metals market analyst at Global Market Insights. “Battery manufacturers are in fierce competition to secure raw materials, which will certainly drive prices higher in the short term.”

Cobalt and sulfur prices also rise

In addition to nickel, the cobalt market has also seen price increases. The growth in cobalt intermediate product prices has directly boosted cobalt sulfate prices and, consequently, led to an increase in the payability index for cobalt content in MHP.

Simultaneously, the price of sulfur—a crucial auxiliary material for nickel production—is also on the rise. A recovery in demand from downstream manufacturers, combined with reduced inventory pressure at Chinese ports, has pushed sulfur prices up. According to forecasts, with the upcoming autumn fertilizer preparation cycle, sulfur demand will continue to increase, providing solid support for prices in August.

Premium nickel matte market is quiet

In contrast to the MHP frenzy, the premium nickel matte market is quite sluggish. Despite limited supply, demand from downstream manufacturers is not strong enough to generate transactions.

“The lack of buying interest for premium nickel matte from downstream businesses has almost ‘frozen’ this market,” said Jane Doe, an independent metals market consultant. “Actual trading activity is insignificant and the price coefficient remains stable, indicating a disconnect between different segments of the nickel supply chain.”

Overall, the price increase of chemical metallurgical intermediate products this week was primarily driven by two factors: (1) a rise in the MHP payability index and (2) an increase in nickel prices on the London Metal Exchange (LME) due to U.S. macroeconomic stimulus policies.

Given these developments, will nickel prices continue to rise in the coming months?

Source: collected from the internet.