Price trend

According to the commodity market analysis system of SunSirs, on July 29, the spot price of electrolytic nickel was 122,683 RMB/ton, with a weekly increase of 0.81% and a year-on-year decrease of 4.03%.

The price rose at the beginning of the month: Disruptions from Indonesia's nickel ore quota policy, coupled with declining LME and domestic inventories, supported a short-term rebound in nickel prices.

The price was volatile in Mid-month: Trump's tariff threats heightened macroeconomic risk aversion, coupled with weak demand, dampened rebound momentum.

The price surged followed by a decline at the end of the month: Domestic "anti-involution" policies stimulated sentiment for industrial products, with nickel prices reaching a monthly high on July 24. After this sentiment gradually digested, nickel prices fell sharply recently.

Macroeconomic Outlook: Bulls and bears intertwined, market competition intensified

Positive Factors

Domestic policies were providing support: The Ministry of Industry and Information Technology will launch a plan to stabilize growth in the steel and nonferrous metals industries, emphasizing the elimination of obsolete production capacity and boosting market expectations for supply-side reforms. The completion of negotiations on the China-ASEAN Free Trade Area 3.0 will benefit regional raw material flows. The manufacturing PMI rebounded to 49.7% in June, with the new orders index expanding, indicating a marginal recovery in the manufacturing sector.

Negative factors overseas suppressed the market

US tariff impact (core bearish factor): Trump announced that tariffs of 15%-40% would be imposed on several countries starting August 1st, fueling risk aversion in the market. If Russia and Ukraine fail to reach an agreement, the US could impose 100% tariffs and secondary sanctions on Russia, further disrupting global trade.

Expectations of a Fed rate cut have cooled: the annual CPI rate rose to 2.7% in June, and the core CPI rose to 2.9%. The market's probability of a rate cut in September has dropped from 65% to 58%, and the strengthening US dollar has suppressed metal prices.

Supply side: Indonesian policy game + loosening of mineral prices

Indonesia's nickel ore quota: 360 million tons have been approved, but only 120 million tons were consumed in the first half of the year, weakening the willingness of miners to maintain prices.

Supply in the Philippines was recovering: With the end of the rainy season, nickel ore shipments were increasing, and inventories were accumulating at Chinese ports. The FOB price for 1.3% nickel ore was $31 per wet ton, a month-on-month decrease.

Cost reductions: Indonesia's domestic nickel ore benchmark price fell 1.8% in July, while Philippine nickel ore prices weakened, leading to marginal improvements in smelting profits.

Inventory changes: LME nickel inventories increased by 906 tons to 204,912 tons during the period, while domestic Shanghai nickel inventories increased by 659 tons to 21,880 tons. Global inventories showed a significant increase, and the surplus situation remained unchanged.

Demand side: Stainless steel was in the off-season + new energy alternatives suppressed

Stainless Steel Industry: High temperatures suppressed demand in July, with production schedules at 43 stainless steel mills falling by 2.87% month-over-month, providing limited support for nickel demand.

Policy support: Multiple departments were cracking down on involuted competition. On July 29th, the benchmark price of stainless steel reached 13,017.50 RMB/ton, a monthly increase of 1.9%, but destocking was slow.

New Energy (Ternary Batteries): Subsidies for new energy vehicles continued, but the increasing share of lithium iron phosphate (LFP) batteries was weakening nickel consumption growth.

Future outlook:

Nickel prices are still dominated by macro and policy factors, and may remain volatile and weaker in the short term. Pay attention to the Federal Reserve's moves in August and the effects of domestic policy implementation.

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