Tariff Policy Fluctuations, Nickel and Stainless Steel Volatile Operation [Institutional Commentary]

【Futures Market Review】The most-traded SHFE nickel contract closed at 126,320 yuan/mt during the daytime session, up 0.57%. The most-traded stainless steel contract closed at 12,790 yuan/mt, up 0.39%.

【Industry Performance】In the spot market, the spot price of Jinchuan nickel was adjusted to 127,875 yuan/mt, with a premium of 2,250 yuan/mt. SMM refined nickel was priced at 126,925 yuan/mt. The average price of imported nickel was adjusted to 125,875 yuan/mt. The average price of battery-grade nickel sulphate was 28,050 yuan/mt, with a premium of 2,325 yuan/mt (Ni contained) over nickel briquette. The profit margin for producing nickel sulphate from nickel briquette was -3.5%. The ex-factory price of 8-12% high-grade NPI was 974 yuan/mtu, and the profit margin of 304 stainless steel cold-rolled coil was -7.85%. SHFE refined nickel inventory stood at 30,332 mt, while LME nickel inventory was 204,252 mt. SMM stainless steel social inventory accumulated to 999,400 mt. NPI inventory in major domestic regions was 24,173.5 mt.

【Market Analysis】The futures market continued to fluctuate upward during the day, mainly following the overall market trend. Fundamentals side, there was no significant fluctuation recently. Despite intensified losses for some NPI producers, production remained stable. However, NPI quotations have approached the level of the early-year fluctuation range. Tsingshan recently tendered 970 yuan/mtu for May, and the subsequent downside room is relatively limited. The nickel sulphate chain price remained relatively stable, with MHP prices generally stable with a slight rise, providing some support. Downstream new energy still has short-term restocking demand, and the medium and long-term new energy chain is expected to rise. The Indonesian royalty is about to be implemented, which may bring slight positive feedback to the futures market, but the subsequent upward momentum is lacking. It is crucial to monitor whether there will be further disturbances from a macro perspective. Under the premise of tariff concerns, it is recommended to focus on short-term trading for the 06 contract.