SMM Analysis: Indonesian Policy Disturbances Drive Nickel Prices to Fluctuate and Strengthen, While Surplus Pressure Remains in Play

Nickel Market Review, March 24-28: Indonesian Policy Disturbances Drive Nickel Prices to Fluctuate and Strengthen Amid Ongoing Surplus Pressure This week, nickel prices showed a trend of fluctuating and strengthening. Spot prices fluctuated between 128,600 and 133,300 yuan/mt, while SHFE nickel futures prices (2505 contract) floated between 128,250 and 132,000 yuan/mt. The core factors affecting nickel prices remain the disturbances from Indonesian policies and support from the cost side. The Indonesian Ministry of Energy and Mineral Resources is expected to issue an adjustment policy on nickel ore royalties before March 31 (before Eid al-Fitr), which will provide some support to nickel prices and may bring upward potential. On the supply and demand side, refined nickel production in March is estimated at 35,000 mt, up 25.14% MoM. However, the recovery in demand has not shown significant improvement, with end-users still adopting a wait-and-see approach, and most companies continuing to purchase as needed. As of March 28, the premiums and discounts for Jinchuan brand ranged from 1,500 to 2,200 yuan/mt, averaging 1,850 yuan/mt. Influenced by macro and micro factors, market premiums and discounts are expected to show a slight weakening trend next week. Overall, the cost support for nickel and the pressure from inventory surplus are still in a tug-of-war, with room for further price increases in the short term. Spot nickel prices are expected to fluctuate between 127,450 and 136,500 yuan/mt next week, while futures prices are expected to range between 127,500 and 135,000 yuan/mt. Bonded zone inventory increased by 800 mt WoW. In terms of inventory, according to the latest SMM survey data, bonded zone nickel inventory this week was 6,300 mt, an increase of 800 mt WoW.