In the Short Term:
Supply Side: Indonesia, as the main global supplier of nickel ore, has approved an RKAB quota of 298 million wmt for 2025, providing sufficient raw material support for smelters. Coupled with the release of some new capacity, nickel production is expected to maintain a growth trend in the short term. However, production increases are limited in a major production area due to adjustments in production load for management optimization, which has somewhat alleviated supply surplus pressure.
Demand Side: After the Chinese New Year, the downstream stainless steel industry is gradually recovering, with steel mills increasing their operating rates, leading to a growing demand for high-grade NPI. In the short term, the supply and demand of high-grade NPI are expected to remain relatively loose, with limited price fluctuation space.
In the Medium and Long Term:
Supply Side: There remains uncertainty over whether Indonesia's nickel ore RKAB quota can be released as scheduled, and some new capacity projects may face delays in commissioning, resulting in lower-than-expected supply growth of high-grade NPI. Additionally, Indonesia's policy direction of promoting the nickel industry chain's downstream extension and restricting raw ore exports will also impact the medium and long-term nickel ore supply landscape.
Demand Side: The domestic stainless steel industry is facing intensified competition, with some steel mills potentially increasing operating rates to capture market share, further driving up demand for high-grade NPI. The growing demand for nickel in the new energy sector will also provide long-term support for nickel prices. In the medium and long term, the supply-demand relationship for high-grade NPI is expected to tighten, with the price center likely to move upward.
Risk Factors:
- The risk of a global economic downturn leading to lower-than-expected stainless steel demand.
- Changes in Indonesia's nickel ore export policies.
- Slower-than-expected growth in nickel demand from the new energy sector.
Summary:
In the short term, Indonesia's nickel ore supply remains sufficient, coupled with the recovery in stainless steel demand, keeping the supply and demand of high-grade NPI in a loose balance. In the medium and long term, uncertainties exist in Indonesia's nickel ore supply, while strong demand growth in the stainless steel and new energy sectors is expected. The supply-demand relationship for high-grade NPI is likely to tighten, with prices expected to strengthen. Close attention should be paid to Indonesia's policy developments, global economic conditions, and trends in the new energy industry.
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