Price trend: (September 1-11) downward unde pressure, oscillating and consolidating

According to the SunSirs commodity market analysis system, as of September 11th, spot electrolytic nickel was quoted at 121,766 RMB/ton, a weekly decrease of 2.25% and a year-on-year decrease of 0.18%. Since the beginning of September, nickel prices have been trending downward, primarily due to factors such as rising global visible inventories and a slow recovery in stainless steel demand, resulting in a volatile and weaker market.

Analysis review

Macroeconomic Outlook: Nickel prices fluctuated amidst a mix of bullish and bearish factors

1. Impact of Indonesian events weakened: Protests in Indonesia at the end of August briefly pushed nickel prices higher, but since they did not affect Sulawesi, the main ferronickel producing region, production remained unaffected. Market sentiment subsided, and nickel prices subsequently declined.

2. US economic data reinforced expectations of a rate cut: August non-farm payrolls fell far short of expectations, the unemployment rate rose to 4.3%, and PPI growth slowed. Market expectations for a Fed rate cut rose, with the probability exceeding 96%. This easing expectation supported a slight rebound in nickel prices.

3. The strengthening US dollar suppressed nickel prices: The US dollar index rebounded, putting pressure on dollar-denominated commodities including nickel, limiting price rebound.

Supply side: Mine supply was sufficient and inventory continued to accumulate

Nickel ore supply was ample: The Philippines remained in peak shipping season, with nickel ore arrivals continuing to increase and prices generally stable. The Indonesian domestic nickel ore benchmark price (second half of September) remained at $14,900 per dry ton. Mine shipments had stabilized after the impact of the rainy season subsided, strengthening supply capacity.

Global visible inventories reached a new high: LME nickel inventories surged by 13,608 tons weekly to 223,152 tons, while Shanghai Futures Exchange nickel inventories increased by 206 tons during the period to 22,111 tons. Global total inventories were already at a historically high level, reflecting the continued severity of the current oversupply situation, which continued to suppress price increases.

Demand side: Traditional demand was weak, and new energy growth provided long-term support

1. Stainless steel consumption remained sluggish

On September 11th, the benchmark price of stainless steel was quoted at 13,055 RMB/ton, down 0.15% during the week. Market sentiment was generally subdued, with traders offering stable prices and end-users maintaining a demand-based purchasing strategy, showing limited acceptance of higher-priced resources. However, the industry remained optimistic about a potential production rebound during the traditional peak season of September and October. If demand rebounds later in the year, it is expected that demand for nickel will improve marginally.

2. Strong demand of new energy, optimistic outlook for nickel sulfate

From January to July 2025, national new energy vehicle production and sales reached 8.232 million and 8.22 million units, respectively, representing year-on-year increases of 39.2% and 38.5%, respectively, with a penetration rate reaching 45%. As high-nickel ternary batteries become the mainstream technology, nickel sulfate, a core precursor raw material, will continue to face a demand gap, providing solid support for nickel prices in the medium and long term.

Market outlook: Nickel prices will fluctuate under pressure in the short term, but will remain resilient in the medium and long term

Nickel prices remain depressed in the short term by high inventories and weak spot prices, with limited upside potential, and are expected to remain range-bound. However, the market should remain cautiously pessimistic. Once the Federal Reserve begins cutting interest rates, improved global liquidity is expected to boost overall sentiment in the metals sector. Continued high growth in the new energy sector will provide structural support for nickel consumption. If the traditional "golden September and silver October" consumption peak season materializes, a rebound in stainless steel production could drive a temporary rebound in nickel demand.

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