In September 2025, nickel prices generally fluctuated, driven by a volatile balance between weak supply and demand and macroeconomic and sentimental factors. Despite positive stimulus from Indonesian policies and global copper mining events, the continued accumulation of global visible inventories to historic highs and the sluggish recovery in stainless steel demand limited the potential for a rebound in nickel prices, ultimately ending the month in a negative state.
Price trend review: twisted and turned, the price center moved downward
Early September (September 1-11): Under downward pressure, prices fell from 124,566 RMB/ton at the beginning of the month to 121,750 RMB/ton, a drop of 2.26%. Global nickel inventories continued to climb to a record high, coupled with weaker-than-expected stainless steel demand during the traditional "golden September" period, leading to a strong bearish market sentiment.
Mid-September (September 11-23): After a period of relatively strong fluctuations, prices fell back. US CPI data and unemployment claims reinforced market expectations of a September Fed rate cut, pushing nickel prices up slightly to 123,750 RMB/ton. However, high inventories and weak demand pressured prices, which subsequently fell back.
Late September (September 23-30): Prices surged, then retreated. Indonesia's tightening mining regulations and the declaration of force majeure at Grasberg, the world's second-largest copper mine, sparked concerns about global metal supply. Sentiment drove nickel prices briefly to 124,400 RMB/ton. However, pre-holiday risk aversion intensified, and the underlying oversupply pressure remained largely unresolved, prompting prices to retreat again.
According to the commodity market analysis system of SunSirs, as of September 30, the spot price of electrolytic nickel was 122,500 RMB/ton, with a cumulative decrease of 1.66% for the whole month and a year-on-year decrease of 7.21%.
Macroeconomic situation: nickel prices fluctuated due to intertwined bullish and bearish factors
Negative factors:
The final estimate of the US second-quarter GDP annualized rate was revised upward significantly to 3.8%, a two-year high. Meanwhile, initial jobless claims declined that week, demonstrating economic resilience. The strong data boosted the US dollar index to above 97.2. The strengthening dollar directly increased the cost of purchasing dollar-denominated nickel, significantly suppressing global nickel prices and acting as a bearish factor limiting any potential rebound in nickel prices in September.
While the Federal Reserve cut interest rates by 25 basis points, it adopted a cautious stance and did not commit to further rate cuts. This move, interpreted by the market as a hawkish rate cut, dispelled investors' expectations of a rapid easing of liquidity, fueled the dollar's rise, and indirectly intensified the downward pressure on nickel prices.
Bullish factors:
Indonesia's Ministry of Energy imposed administrative sanctions on 190 mining companies, including approximately 30 nickel producers, for failing to pay reclamation bonds. While this move did not immediately disrupt supply, it sparked market concerns about the stability of mining policies in Indonesia, a major global nickel supplier. Combined with the Indonesian copper mining incidents during the same period, this created a "mining disruption" theme, fueling several brief rallies in nickel prices.
Grasberg, the world's second-largest copper mine, had declared force majeure due to a mudslide. While this incident didn't directly affect nickel, it had sparked widespread concerns about the global metals supply chain. Bullish sentiment had spread throughout the base metals market, indirectly driving a brief upward trend in nickel prices.
August's non-farm payroll figures fell far short of expectations, the unemployment rate rose to 4.3%, and initial jobless claims surged in September. These data reinforced market expectations of an imminent Federal Reserve interest rate cut (with a probability exceeding 96%). This expectation of a rate cut will improve the outlook for global economic growth and metal demand, providing slight support for nickel prices.
Supply side: Inventory pressure was high, and the loose supply pattern remained unchanged
Global inventories surged: LME nickel inventories surged by over 21,000 tons to 231,312 tons, while Shanghai Futures Exchange nickel inventories surged by 2,912 tons to 24,817 tons. Global inventories were at an absolute historical high, the primary factor suppressing nickel prices.
Supply remained ample: The Philippines was in peak shipping season, and Indonesian mining regulations were expected to tighten. The benchmark domestic nickel ore price for the first quarter of October was $15,101.67 per ton, up approximately 0.68%. Supply remains ample. Data from the World Bureau of Metal Statistics (WBMS) confirmed a global nickel market oversupply of 244,300 tons from January to July 2025.
Demand side: Traditional sectors were weak, while new energy provided long-term support
Sluggish Stainless Steel Demand: As a major nickel consumer, the stainless steel market saw tepid trading activity, with end-users purchasing on demand. While some stainless steel mills experienced production disruptions due to ultra-low emission upgrades and maintenance at production lines, overall stainless steel production remained relatively high, maintaining strong demand support for nickel prices. The benchmark stainless steel price was reported at 13,055 RMB/ton on September 30, down 0.19% month-over-month.
Supported by the new energy outlook: From January to July, China's new energy vehicle production and sales both grew by over 38% year-on-year, with a penetration rate of 45%. The trend toward higher nickel content in ternary batteries was clear, and nickel sulfate, a core raw material, remained a long-term demand gap, providing the most solid support for nickel prices.
Market outlook
In the short term, the fundamental situation of "high inventory" and "weak demand" is difficult to reverse quickly, and nickel prices will continue to be under pressure. However, there is also support below:
Cost support: Indonesian nickel iron cost line provides a certain bottom support for prices.
Policy disruption: If Indonesia's mining industry regulation continues to intensify, it could trigger market concerns about supply stability.
Long-term positives: Strong growth in the new energy sector ensures nickel's strategic demand remains unchanged.
Summary: Nickel prices fluctuated and fell in September amidst a volatile market tussle between bulls and bears. The market was seeking a balance between weak realities and strong expectations. Until there is a clear turning point in inventories or substantial improvement in stainless steel demand, nickel prices are unlikely to break out of their upward trend.
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