[SMM Analysis] Nickel Prices Expected to Remain Strong in the Short Term, Long-Term Inventory Still Faces Surplus Pressure

Published: Mar 21, 2025 15:59

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Nickel Prices Show Short-Term Strength, Long-Term Inventory Still Faces Surplus Pressure This Week, Nickel Prices Fluctuated Downward. Spot Prices Varied Between 129,800 and 132,400 Yuan/mt, While SHFE Nickel Futures Prices Ranged from 128,000 to 134,000 Yuan/mt.

March 17-21 Nickel Market Summary: Nickel prices are expected to be strong in the short term, but long-term inventory still faces surplus pressure. This week, nickel prices fluctuated downward. Spot prices ranged between 129,800 and 132,400 yuan/mt, while SHFE nickel futures prices fluctuated between 128,000 and 134,000 yuan/mt. According to the Indonesian government's tax policy plan, the nickel ore tax rate will increase from 10% to 14%-19% (based on HMA price fluctuations), and the tax rates for intermediate products such as nickel pig iron and nickel matte will also rise, with expectations of implementation gradually increasing. If this policy is implemented, the cost of nickel ore is expected to increase by $2-4.5/wmt, and the cost of nickel pig iron will rise by 20-45 yuan/mt. Although the policy adjustment has not been officially confirmed, the market generally expects its implementation, providing some support for short-term nickel prices. Overall, in the short term, nickel prices are driven by Indonesian tax policies, with some room for price increases. On the supply and demand side, downstream purchases are mainly for restocking, and demand recovery is slow, with the market remaining in a wait-and-see state. In general, although the market surplus situation has not been alleviated and demand has not strongly rebounded, the Indonesian tax policy will raise costs, and it is expected that short-term nickel prices have some upward potential. As of March 21, the premiums and discounts for the Jinchuan brand were 1,300-2,100 yuan/mt, averaging 1,700 yuan/mt. Affected by the Indonesian tax policy, prices are expected to have some room for increase next week, with a bullish outlook. In summary, considering the ongoing policy expectations and the need for spot-futures price spread repair, short-term prices may continue to rise. It is expected that next week's spot nickel prices will fluctuate between 127,000 and 136,900 yuan/mt, and futures prices will fluctuate between 127,000 and 135,000 yuan/mt. Bonded zone inventory WoW remained at the same level. Inventory-wise, according to the latest SMM survey data, this week's bonded zone nickel inventory was 5,500 mt, unchanged from last week.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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