This week, nickel prices first rose and then fell. As of the weekend, the spot nickel price was 121566.67 yuan/ton, up 1.91% from the beginning of the week and down 0.65% year-on-year.
Macroscopically, the probability of the Federal Reserve keeping interest rates unchanged in October is about 83%, but the expectation of a rate hike in December remains strong. The US dollar index oscillates around 101.7, and long-term US bond yields remain high, putting continued pressure on colored valuations. Domestically, the limit of 550 billion yuan of local government bonds has been issued, but the transmission to nickel terminal consumption is not yet obvious. At the macro level, the qualitative assessment of nickel prices is that it does not constitute an additional bearish shock in the short term, but it cannot provide upward driving force, and the financial attribute side maintains a neutral bias state.
In terms of raw materials, Indonesia’s RKAB quota for 2026 has been revised to about 290 million tons, an increase of about 30 million tons from the initial setting. The HMA benchmark price has also been lowered, and the mining cost anchor continues to loosen. Although there is rainfall disturbance in the main production areas of the Philippines, mines have taken advantage of the good weather window to speed up shipments, resulting in high port arrivals and a slight decline in nickel ore prices. The core signal on the raw material side is clear: local supply disruptions are not sufficient to offset the overall easing brought about by Indonesia’s quota expansion, and cost support is still shifting downward.
On the supply side: The biggest variable on the supply side this week comes from multiple Chinese nickel companies discussing rumors of a joint production cut of about 30% by Indonesia’s HPAL plant, which once triggered concentrated short selling and price rebound. But the RKAB quota has substantially increased, and Indonesia’s smelting capacity is still increasing. The global surplus pattern has not changed due to the “negotiated production reduction”. As of October 21st, LME nickel inventory was 280900 tons, and the previous warehouse receipt was 91000 tons, with absolute levels still at historical highs. The suppression of rebound space by inventory continues to exist.
On the demand side, the production schedule of stainless steel 300 series in October continued to decline compared to the previous month, and the profits of steel mills were inverted. There is a strong willingness to lower the price of nickel iron, and procurement is only maintained for essential needs. In terms of new energy, ternary precursors are subject to lithium iron phosphate pressure, resulting in weak production and limited incremental purchases of nickel sulfate; In September, the production of ternary materials decreased by about 10.7% month on month, and the precursor decreased by about 7.8% month on month. Neither of the two main demand paths provides marginal increments, meaning that any rebound driven by supply side sentiment lacks substantial downstream support.
Influencing factors: The core contradiction of the current nickel price is not whether there is an excess, but to what extent and at what speed the expected reduction in production can correct the excess already included in the price. If the HPAL joint production reduction goes from “discussion” to “substantive implementation”, there is still room for short-term short covering; If the news is falsified or the reduction in production falls short of expectations, there is a risk of a rebound in the early stage. At the same time, the actual release pace of Indonesia’s RKAB quota will determine the speed of cost reduction at the mining end, and together they will constitute the main source of price fluctuations next week.
In summary, macroeconomic suppression has not been eliminated → mining costs continue to decline → supply side “expected production cuts” can only provide pulse like emotional support, unable to reverse the overall surplus → demand side stainless steel and new energy weaken synchronously, and the rebound lacks downstream absorption → high inventory constitutes a hard constraint above. This week’s price trend itself has confirmed this chain: rumors of production cuts in the first half of the week drove a rebound, but in the second half, it returned to weakness. Short term nickel prices are expected to experience short-term regional fluctuations.
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