1.27Nickel Morning Briefing
Refined Nickel:
Last week, the nickel market continued to experience a supply surplus, with refined nickel prices under pressure and trending downward. As of the latest weekly data, SMM 1#refined nickel average spot price was 125,450yuan/mt, with a single-day decline of 2.11%. In the futures market, the most-traded SHFE nickel contract closed at 124,200yuan in the morning session, down 2.7%. On the macro front, market concerns were heightened by US President Trump's statement about considering raising tariffs on Chinese goods. A stronger US dollar index and the approach of the Chinese New Year holiday weakened downstream consumption. Stainless steel enterprises saw significant inventory buildup, and post-holiday efforts are expected to focus on inventory digestion, collectively weighing on nickel prices.
From a fundamental perspective, Indonesia's RKABapproval volume totaled approximately 2.9849 billionmt, exceeding annual demand, indicating relatively loose supply. Domestic NPI plants remained in a state of losses, with slight profit recovery but still maintaining just-in-time procurement. In the Philippines, nickel ore supply decreased due to the off-season, while Indonesia's laterite nickel ore market was active, with prices fluctuating upward and ocean freight rates stable. The Indonesian government stated that production cuts mainly targeted newly established and unapproved enterprises, with limited impact on overall supply. Additionally, domestic and international nickel inventories continued to rise, making it difficult to reverse the supply surplus. Coupled with bearish macro sentiment, SHFE nickel prices are expected to maintain a fluctuating downward trend next week.
Nickel Sulphate:
Last week, the SMM battery-grade nickel sulphate index price was 26,576yuan/mt, with the quotation range for battery-grade nickel sulphate between 26,380 and 27,040yuan/mt. The average price rebounded slightly WoW, reflecting an overall upward trend in the nickel salt market this week.
On the supply side, the nickel salt market remained tight, with limited circulation in the spot order market. Nickel sulphate manufacturers faced losses, leading to increased sentiment to stand firm on quotes. On the demand side, most precursor plants had completed January nickel salt restocking, with only a few still requiring additional restocking. However, due to factors such as the suspension of logistics during the Chinese New Year, pre-holiday order demand remained sluggish, and spot market activity was still low. Notably, although some post-holiday orders had been signed, actual procurement volumes were limited. Ternary cathode precursor plants, facing losses, were cautious in their purchases. Furthermore, with some nickel salt smelters undergoing maintenance or production cuts, nickel salt circulation remained tight.
Considering these factors, despite the current sluggish demand, the tight supply and losses suggest that nickel salt prices may still have room to rise after the holiday.
NPI:
Last week, the SMM 8-12%high-grade NPI average price was 941.1yuan/mtu (ex-factory, tax included), up 5.2yuan/mtu WoW. The Indonesian NPI FOB index rose 1.3USD/mtu WoW. This week, high-grade NPI prices further recovered. On the supply side, domestically, weak previous high-grade NPI prices led to expanded losses for smelters, prompting some to conduct maintenance or reduce production loads, resulting in slightly lower output. In Indonesia, recent rainfall eased compared to earlier periods, and some enterprises, driven by profits, showed no plans for production cuts. On the demand side, market transactions weakened during the week. With the Chinese New Year approaching, market inquiries were lackluster. Coupled with a high proportion of long-term contracts among stainless steel mills and optimistic market expectations, prices were supported by limited market circulation resources. High-grade NPI prices are expected to remain stable after the holiday.
Stainless Steel:
Last week, stainless steel spot prices remained stable, with a sluggish market. As of January24, SMMWuxi region304cold-rolled coil prices were 13,000-13,300yuan/mt, with an average price up 120yuan/mt WoW. Hot-rolled coil prices were 12,400-12,600yuan/mt, with the average price unchanged WoW.
On the supply side, as the Chinese New Year approached, most steel mills nationwide reduced production, but the scale of reduction was limited. Some steel mills in east and south China began maintenance and are expected to resume production on the eighth day of the lunar new year. This week, stainless steel social inventory increased, up 1.02% WoW. Specifically, in the Wuxi region, 200series inventory rose 0.86%, 300series rose 1.58%, and 400series fell 1.04%. In the Foshan region, 200series inventory rose 0.88%, 300series rose 1.76%, and 400series fell 0.91%. On the demand side, with the holiday starting, market transactions were sluggish, and upstream and downstream demand remained low.
In terms of raw materials, this week, NPIprices rose slightly, while high-carbon ferrochrome, SiMn alloy, EMM, and stainless steel scrap prices remained stable, providing continued support for market prices. After the holiday, market inventory is expected to continue increasing, with potential inventory buildup, and spot prices are likely to remain stable or decline slightly.
