The implementation of Indonesia's nickel PNBP policy may lead to an upward correction in nickel prices. [Institutional Commentary]

Market Review

As of April 11, the closing price of the most-traded SHFE nickel contract was 121,300 yuan/mt. Nickel prices rebounded from an oversold position during the week, with a 4.74% decline compared to the closing price on April 3. The closing price mainly fluctuated between 118,640 and 121,600 yuan/mt.

Logical Perspective

Macro side: The US imposed reciprocal tariffs on April 2, which far exceeded expectations. In the first half of the week, the market traded on recession and risk aversion. Later, the US suspended tariff hikes on some countries, and market risk appetite began to recover from Thursday. Under the US President's "capricious" style, tariffs will dominate the macro narrative in April. Attention should be paid to subsequent Sino-US tariff negotiations, re-export trade, and domestic policies to stimulate domestic demand.

Raw material side: The Indonesian government once again announced that the PNBP policy on nickel resources would be implemented in the second week of April, and the expected increase in costs for the nickel stainless steel industry chain may soon materialize. On the nickel ore side, the supply of nickel ore futures remained tight, and Indonesian nickel ore prices remained firm. On the nickel sulphate side, battery-grade nickel sulphate prices slightly declined due to reduced cost support and cautious downstream观望.

Supply and demand side: Last week, the center of nickel prices significantly shifted downward, and downstream restocking was released, leading to a decline in social inventory of refined nickel. China's social inventory of refined nickel in 27 warehouses decreased by 2,549 mt to 42,896 mt, a drop of 5.61%. Among this, warrant inventory decreased by 2,907 mt to 24,464 mt, while LME nickel inventory increased by 4,242 mt to 204,492 mt, a rise of 2.12%.

Market Outlook and Investment Advice

In summary, with a marginal easing of the global trade war, short-term macro sentiment may improve. Coupled with the strong expectation of the implementation of Indonesia's nickel PNBP policy in the near term, short-term nickel prices may recover upward. The main fluctuation range for the most-traded contract this week is expected to be 116,000-127,000 yuan/mt, with caution against repeated tariff policies.

Risk Warning

Domestic consumption exceeds expectations; policy changes in major nickel-supplying countries; overseas macro risks; unexpected changes in Indonesian nickel ore supply.