The rebound in nickel prices is limited, beware of macro disturbances [Institutional Commentary]

As of April 18, the closing price of the most-traded SHFE nickel contract was 125,600 yuan/mt. Nickel prices fluctuated and recovered during the week, with a 3.544% increase compared to the closing price on April 11. The closing price mainly ranged between 123,090-126,030 yuan/mt. Macro perspective: Fed Chairman Powell's hawkish stance and the recent tariff policy have somewhat eased market sentiment shocks. However, the uncertainty of tariff policies remains a macro risk, and attention should be paid to domestic macro policy responses. Raw material perspective: The Indonesian government announced that the PNBP policy for nickel royalties will be officially implemented on April 26. The royalty will be levied only once in the industry chain, and the market has already fully anticipated this policy. The main impact on nickel prices lies in the marginal increase in costs. Indonesian nickel ore prices remain firm, and with the implementation of the PNBP policy, nickel ore prices may increase by $1-2/wmt. For nickel sulphate, MHP spot orders have been tight recently, and nickel sulphate prices have remained stable under cost-based pricing. Supply and demand perspective: Downstream restocking demand has been released earlier. Last week, spot transactions of refined nickel were moderate, and the overall supply of refined nickel remained loose, with the industry still in a surplus situation. Last week, China's social inventory of refined nickel in 27 warehouses increased by 184 mt to 43,080 mt, a 0.43% increase. Among them, warrant inventory increased by 627 mt to 25,091 mt; LME nickel inventory increased by 36 mt to 204,528 mt, a 0.02% increase. Market outlook and investment advice: In summary, the impact of tariffs on macro sentiment has eased, and the implementation of Indonesia's nickel PNBP policy is imminent. The expected marginal increase in costs provides some support for nickel prices. However, with nickel valuations already recovered and fundamentals unlikely to improve significantly, the room for further rebound in nickel prices is limited. It is expected to mainly fluctuate within the 120,000-130,000 yuan range, with caution against repeated tariff policy changes. Risk warnings: Domestic consumption exceeds expectations; policy changes in major nickel supply countries; overseas macro risks; unexpected changes in Indonesian nickel ore supply.