Market Overview
This week, nickel prices showed weak performance. On the macroeconomic front, the US election became a focal point for market transactions, with policies gradually being priced in. These policies have somewhat suppressed the consumption of non-ferrous metals, leading to declines in overall metal prices recently. However, there are contradictions within these policies. While they suppress short-term commodity consumption, they may boost long-term consumption, increasing macroeconomic uncertainty.
On the fundamental side, the expected surplus in the nickel industry continues to suppress nickel prices. In the refined nickel sector, prices have been continuously declining this week. However, spot market consumption remains weak, with premiums and discounts at low levels due to prior stockpiling being completed. The market is generally well-supplied, and weak demand continues to press down on pure nickel prices. Increased overseas inventories are adding pressure on delivery, causing prices to mainly adjust downward. Currently, domestic refined nickel export profits are extremely compressed, warranting attention to future export conditions.
In the nickel-iron sector, prices surged this week. The short-term market is strongly influenced by high prices of Indonesian nickel ore and tight supply-demand balance, maintaining cost support. Despite the downward pressure on stainless steel, steel mills have reduced production, leading to decreased nickel-iron demand. The supply-demand tension has eased somewhat, but with stable low stainless steel prices, the downward drive for nickel-iron remains small, and prices are expected to stay strong in the short term.
For nickel sulfate, prices weakened this week as intermediate raw material prices continued to decline due to falling nickel prices. With significant previous price drops, industrial profits have been notably compressed, and production profits have entered a loss phase, prompting some nickel salt plants to cut production to stabilize prices. However, stockpiling has ended, and demand from the cathode sector has not recovered significantly, keeping the market in a wait-and-see mode. Nickel sulfate’s upward drive is weak, and it remains to be seen if nickel prices have bottomed out. Prices are expected to run weakly stable.
Overall, the nickel market structure remains bearish. Surplus pressures continue to weigh on prices, weakening the upward drive. With macroeconomic uncertainties and differentiated market fundamentals, nickel prices are expected to fluctuate within a range of 124,000-132,000 yuan/ton next week, with attention to changes in macroeconomic sentiment.
Nickel Ore Prices Prone to Increase, Nickel-Iron Prices Stable
In the nickel ore market, prices increased this week due to higher nickel-iron prices, maintaining a strong stance. Recent rains in the Philippines have hindered nickel ore mining and shipments. In Indonesia, the August benchmark nickel ore prices are expected to decline, but premiums remain at $15-18/wet ton. Tight domestic nickel ore supplies keep demand for Philippine medium and high-grade nickel ore strong, with Ni: 1.4% grade nickel ore trading at $43-44/wet ton, or even $45/wet ton. However, domestic iron plants, under continuous losses, have limited acceptance of high prices. Only Ni: 0.9% grade nickel ore can still trade at $37/wet ton, with high procurement from domestic carbon steel plants. With strong support, nickel ore prices are more likely to rise than fall.
In the nickel-iron market, bullish sentiment prevailed this week, with higher supplier quotes and recent transaction prices reaching 995 yuan/nickel (factory tax included). After the price surge, nickel-iron prices remained stable.
On the cost side, weather impacts in the Philippines continued to hinder mining and shipments. Ni: 1.4% nickel ore CIF prices increased by $1 to $41/wet ton. Indonesian nickel ore supply remains tight, with firm overall prices. Supply-side, iron plants are still under cost inversion, with most quotes at 1000-1020 yuan/nickel (factory tax included). Traders, facing high previous acquisition costs, have low willingness to offer discounts. On the demand side, stainless steel futures and spot prices fluctuated, with market trading turning cold from warm. End-user demand remains weak, slowing destocking speed, and steel mills maintain a price-pressing attitude towards raw materials. Future attention should focus on the latest transaction prices and market trends.
Continuous Losses for Domestic Iron Plants, Recovery of Profits for Indonesian Nickel-Iron
This week, nickel-iron prices stabilized at 990-1000 yuan/nickel (factory tax included). On the cost side, weather impacts in Philippine mines continue, obstructing nickel ore supply and maintaining high quotes. Recent increases in nickel-iron prices have narrowed domestic iron plant losses but they remain in a loss state. Iron plants have strong price-stabilizing sentiment, with limited room for price concessions. This week, RKEF nickel-iron plants’ highest spot cost reached 1026 yuan/nickel, with the lowest profit margin at -4.29%.
Indonesian nickel-iron prices stabilized at 990 yuan/nickel (cabin tax included) this week. Tight Indonesian nickel ore supply persists, with continued demand for Philippine nickel ore imports. Although the August Indonesian domestic trade benchmark price declined, premiums remained at +$15. With rising nickel-iron prices, Indonesian iron plant profit margins have recovered. Currently, Indonesian nickel-iron spot cash cost reaches up to $10,872/ton of metal nickel, with the lowest profit margin recovering to 8.5%.