Nickel and Stainless Steel Prices Show Increasing Resistance After Recovery [Institutional Commentary]

1. Supply side, for nickel ore, the weekly Indonesian laterite nickel ore with 1.2% content remained at $25.1/wmt, while the 1.6% content rose by $1.7/wmt to $52.5/wmt. The premiums and discounts for Indonesian nickel ore increased by $1/wmt to $25/wmt, and the 1.5% content in the Philippines maintained at $11.25/wmt. For refined nickel, the weekly market transactions improved, but the willingness to purchase at high prices was weak. For nickel iron, the price center of market transactions shifted downward. For intermediate products, production in Indonesia was affected, leading to relatively tight short-term supply. For nickel sulphate, raw material prices remained relatively strong, and theoretical profits turned into losses.

2. Demand side, for stainless steel, warrant inventory decreased by 16,141 mt WoW to 180,000 mt. The total social inventory in the mainstream markets across the country, based on the 89 warehouse caliber, increased by 2,277 mt WoW to 1.087 million mt, with the 300-series decreasing by 7,552 mt WoW to 722,946 mt. The production schedule for crude steel in April from 43 domestic stainless steel manufacturers was 3.4845 million mt, up 0.45% MoM, with the 300-series remaining stable and the 200-series showing a relatively significant increase. The expected stainless steel production in Indonesia for April remained stable at 440,000 mt. Market sentiment dragged down finished product prices, but raw material prices remained relatively firm, and theoretical losses deepened. For new energy, weekly battery cell production increased by 2.7% WoW to 23.16 GWh, with lithium iron phosphate increasing by 1.6% WoW to 15.69 GWh and ternary increasing by 4.9% WoW to 7.47 GWh. According to the CPCA, the new energy consumption in the automotive market in March was strong, and the scrappage and renewal policy led to structural growth in the market.

3. Inventory side, LME inventory increased by 882 mt to 204,528 mt during the week. SHFE nickel inventory decreased by 138 mt to 25,091 mt, social inventory increased by 652 mt to 43,960 mt, and bonded zone inventory decreased by 500 mt to 5,800 mt.

4. Viewpoint, on the news front, the Indonesian Ministry of Energy and Mineral Resources' Government Regulation No. 19/2025 on the types of non-tax state revenues and tariffs applicable to mineral and coal royalty rates introduced new regulations. APNI Secretary General Meidy Katrin stated that the government raised nickel royalties at the wrong time. This was due to geopolitical tensions and the escalation of the US-China trade war, which led to a significant drop in global nickel prices. Meanwhile, business participants have requested the government to reassess and propose revisions to the mineral benchmark price (HPM) formula. Weekly nickel ore prices rose slightly, but the price center of domestic nickel iron transactions shifted downward to 980 yuan/mtu.

For stainless steel, the prices of nickel iron and ferrochrome in raw materials both dropped slightly, weakening the cost support for stainless steel. Coupled with structural inventory buildup in social inventory, stainless steel prices fluctuated rangebound.

For new energy, affected by the accident in the Indonesian industrial park, short-term MHP supply was relatively tight, and the cost support for nickel sulphate remained relatively strong. Ternary cathode precursor production increased MoM in April, but looking ahead, raw material supply is expected to recover, and demand for ternary is relatively pessimistic. For Class 1 nickel, domestic social inventory saw a slight buildup, and overseas inventory continued to accumulate. Nickel price valuations are continuously being repaired, and although overseas policy disturbances have raised costs, from a fundamental perspective, resistance above may gradually emerge. In the short term, it is still necessary to be vigilant about sentiment disturbances and pay attention to Class 1 nickel inventory.