1、 Trend analysis
Nickel prices have fluctuated widely this week. As of the weekend, the spot nickel price was 117383.33 yuan/ton, a decrease of 2.67% from the beginning of the week and a year-on-year decrease of 4.14%.
Macro wise: The overall macro sentiment this week is bearish, significantly suppressing nickel prices. In September, the US CPI rose by 3.7% year-on-year, higher than the previous value of 3.4%. The significant increase in gasoline prices by 9.1% month on month contributed more than half of the increase, and the process of inflation falling has stalled. The unexpected CPI data reignited the market’s bet on further interest rate hikes by the Federal Reserve, with the US dollar index hitting an 18 month high at one point, forming a systematic pressure on US dollar denominated metals from the valuation side. According to CME data, the probability of a rate hike in October has risen to 33.2%, but officials have since downplayed their stance. However, the overall interest rate environment still puts pressure on the valuation of the non-ferrous sector.
In terms of raw materials, nickel ore, nickel iron, and intermediate products all weakened this week. In the second half of October, Indonesia’s HMA dropped to $15847.67 per ton, with almost zero rise in humus soil. The Philippines’ mining volume increased, and the mining industry turned to buyers. The factory price of high nickel iron has dropped to 1030-1050 yuan/nickel, and steel mills have lowered the price to below 1000 yuan. MHP、 High ice nickel FOB continues to decline, and cost support continues to collapse.
On the supply side: The loose situation on the supply side continues, and the cost support on the mining side is further weakened. The Indonesian Ministry of Energy and Mines predicts that the actual production of nickel ore for the whole year of 2026 will be about 290 million tons, exceeding the RKAB quota limit of 260 million to 270 million tons, and the expectation of tight raw materials will continue to ease. In the first half of October, the benchmark price (HMA) for domestic nickel ore in Indonesia was lowered to $16322.67 per ton, a decrease of 2.25% from the second half of September. The mainstream grade premium of humus ore turned negative for the first time across the board, and the pricing dominance of the mining end has shifted to buyers. The Indonesian Nickel Industry Forum predicts a year-on-year decrease of 3.5% to 4% in total processed nickel production in 2026, but the HPAL wet process project in 2027 will drive a significant increase in production capacity.
On the demand side: The overall demand side is weak, but there is a clear differentiation internally. As stainless steel is the largest consumer of nickel, steel mills continue to lower the price of nickel iron to around 945 yuan/nickel. There is an expectation of a month on month decrease in stainless steel production in October, which has dragged down the consumption of nickel iron. In terms of new energy, the production of ternary materials in September was about 81300 tons, a decrease of about 10.7% compared to August, and the production of ternary precursors was about 89100 tons, a decrease of 7.8% compared to the previous month. However, the terminal demand for ternary batteries has shown strong resilience, and the demand for nickel has not decreased due to the decline in sales of new energy vehicles, but has continued to grow year-on-year. Pure nickel and nickel salt prices have shown a dual track divergence, and the nickel end of the battery has become passive in response to spot fluctuations due to the long-term price lock mechanism, while the price of nickel chloride remains stable.
Influencing factor: The inventory pressure continues to increase. As of October 16th, the previous period’s nickel warehouse receipts increased to 94036 tons, significantly accumulating compared to last week; Although LME nickel inventory has decreased, it still remains at a high level of over 280000 tons. The domestic social inventory of nickel plates is about 122900 tons. Although there has been a slight destocking of 602 tons on a weekly basis, the absolute level is still at a high level, making it difficult to destocking refined nickel. On October 13th, the International Nickel Research Group (INSG) revised the global primary nickel market forecast for 2026 from a shortage of 32000 tons in April to an excess of 19000 tons, and also estimated a surplus of 70000 tons in 2027, further confirming the surplus pattern. In addition, the Indonesian Ministry of Energy and Mines has stated that it will consider tightening the restrictions on new production capacity for semi-finished nickel smelting projects, and has promised to accelerate the RKAB audit in 2027. Policy uncertainty remains a focus of attention in the future.
In summary, nickel prices continued to decline weakly this week, with US inflation exceeding expectations → interest rate hike bets heating up → US dollar strengthening → pressure on non-ferrous metal valuations, coupled with the continued release of Indonesian mining quotas → lower mining prices → weakened cost support, as well as stainless steel prices and ternary production cuts → weakened demand expectations. The triple negative resonance drove prices to break through the cost line. The current nickel price has fallen below the cash cost of about 118776 yuan/ton, and the widespread losses in the smelting process have limited further downward space. However, the high inventory and surplus pattern still suppress the rebound momentum. It is expected that nickel prices will maintain a low, weak and volatile pattern in the short term.
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