[SMM Analysis] Nickel Market Trend Analysis from February 17 to February 21

Nickel Market Trend Analysis This Week

Last week, nickel prices were influenced by both macro and micro factors, showing a fluctuating trend. LME nickel prices closed at $15,455/mt on February 14, down 0.29% from the previous week. The most-traded SHFE nickel 2503 contract closed at 124,620 yuan/mt on February 14, up 0.27% from the previous trading day. This week, nickel prices continued to be affected by Indonesian policies, the Federal Reserve meeting, and inventory levels. Additionally, the EU's proposal on February 20 to ban imports of Russian aluminum impacted LME prices, which showed mixed performance, with nickel prices rebounding from declines to close higher. Furthermore, comments from Trump about potentially reaching a new trade agreement with China pushed SHFE nickel higher yesterday. As of today, LME nickel opened at $15,615/mt, down 1.31% from the previous trading day. The most-traded SHFE nickel 2503 contract closed at 125,040 yuan/mt, down 0.79%.

Cost Side: Uncertainty in Indonesian Nickel Ore Exports Remains a Market Focus

This week, apart from the uncertainty surrounding Indonesian policy developments, which continues to disrupt the market, attention should also be paid to the EU's sanctions on Russian metal products. Although nickel was not included, concerns over Russian nickel supply have intensified. Additionally, Trump's statement about potentially reaching a new trade agreement with China has boosted market sentiment, driving nickel prices higher yesterday.

Demand Side: Weak Downstream Demand

The stainless steel market has yet to show significant improvement. Although some traders have anticipated weaker post-holiday demand based on seasonal patterns, this year's demand recovery has been much weaker than the same period in previous years. Meanwhile, the new energy sector has seen some support for nickel demand due to the growth in EV sales, but the recent decline in lithium prices may indirectly suppress nickel demand growth. Alloy demand has shown relatively stable increases.

Supply Side: Refined Nickel Surplus Persists

As of February 21, domestic refined nickel social inventory across six regions reached 47,209 mt, down 4.55% MoM but up 95.84% YoY. The surplus situation continues to limit the upside room for nickel prices.

Market Trend: Sideways Movement, Macro Sentiment Drives Volatility

Overall, nickel prices showed a fluctuating trend this week, surging on Thursday (February 20) before pulling back. Between February 17 and 21, SHFE nickel prices fluctuated within the range of 123,260 yuan/mt to 126,360 yuan/mt.

Outlook: Focus on Policy and Demand Changes

In the short term, nickel prices are expected to maintain a sideways movement. The market should closely monitor further developments in Indonesian and Philippine nickel ore policies, as well as the actual recovery in demand from the stainless steel and new energy sectors.