Price trend

According to data from the SunSirs' commodity market analysis system, as of November 6th, the spot price of electrolytic nickel was 120,750 RMB/ton, down 1.21% week-on-week, hitting a new low in nearly three months, and down 4.79% year-on-year. While macro sentiment in the nickel market had improved somewhat, high inventory levels and weak end-user demand continued to suppress prices.

Analysis review

Macroeconomic aspects:

The strengthening of the US dollar suppresses metal prices: The internal policy divergence within the Federal Reserve raised doubts in the market about the expectation of a December interest rate cut. The US dollar index had broken through the 100 mark strongly, reaching a three-month high and exerting widespread pressure on non-ferrous metals priced in US dollars.

Easing tensions between the US and China boosted market sentiment: The US lifted its 10% tariffs on Chinese goods, suspended its 24% retaliatory tariffs for a year, and temporarily halted its Section 301 investigations into Chinese maritime, logistics, and shipbuilding industries. These measures eased concerns about escalating trade frictions and provided short-term support for market sentiment.

Supply side:

Tight nickel ore supply provided cost support: The rainy season in the Philippines had tightened nickel ore supply, keeping ore prices firm and providing some cost support for electrolytic nickel. While Indonesia's November (first phase) domestic benchmark price was slightly lowered by 0.44%, this reduction may reflect market expectations of weak nickel demand, which will suppress upward momentum in nickel prices in the short term.

Global inventories continued to accumulate, with significant oversupply pressure: LME nickel inventories increased by 1,002 tons to 253,104 tons during the cycle, while domestic SHFE nickel inventories rose by 1,301 tons to 32,689 tons during the same period. The simultaneous increase in both domestic and international inventories reflected that the oversupply situation had not improved, continuing to put downward pressure on nickel prices.

Demand side:

The stainless steel market remained under pressure: overall stainless steel production remained high, but end-user demand showed no significant improvement. To alleviate inventory pressure, companies lowered prices to move inventory, resulting in a weak and volatile price trend. On November 6th, the spot price of stainless steel was 12,800 RMB/ton, down 0.78% from the beginning of the month. Domestic crude stainless steel production plans for November decreased by 2.06% month-on-month, further weakening support for nickel raw material demand.

New energy demand was weakening marginally: The output of ternary precursors in November is expected to decrease by 8% month-on-month to 85,000 tons, reflecting a slowdown in demand for nickel raw materials in the power battery industry chain, and a weakening of the driving effect of the new energy sector on nickel prices.

Market outlook

Despite the positive macroeconomic environment brought about by the easing of tensions between the US and China, which had alleviated market pessimism to some extent, the fundamentals of the nickel market remained weak. While the supply side is supported by ore prices, the continued accumulation of global inventories, coupled with weakening demand from the two major downstream sectors of stainless steel and new energy, limits the upside potential for nickel prices. It is expected that nickel prices will maintain a volatile trend in the short term, and close attention should be paid to the progress of inventory reduction and signs of a recovery in downstream consumption.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.