Price trend

According to data from the SunSirs' commodity market analysis system, as of November 18, the spot price of electrolytic nickel was 117,383 RMB/ton, down 3.14% week-on-week, hitting a five-year low, and down 5.97% year-on-year. The continued decline in nickel prices was mainly due to a combination of factors, including macroeconomic pressures, oversupply, and weak demand.

Analysis review

Macroeconomic Overview:

Limited Policy Adjustments in Indonesia: While Indonesia's Government Regulation No. 28 of 2025 restricts investment in new nickel smelters and plans to reduce the 2026 nickel ore quota (RKAB), the policy has had a minimal impact on short-term supply, resulting in a muted market reaction. In the long term, Indonesian nickel ore supply remains high, failing to reverse the oversupply expectation.

US Economic and Policy Uncertainty: Missing US employment data and the risk of a government shutdown were dragging down economic expectations, with fourth-quarter GDP potentially declining by 1.5%. Significant internal disagreement within the Federal Reserve regarding the interest rate path, with hawkish signals suppressing expectations of rate cuts, and a stronger dollar exacerbating downward pressure on dollar-denominated commodity prices, including nickel.

China's economic resilience vs. insufficient demand support: China's industrial value-added grew by 4.9% year-on-year in October, with the equipment manufacturing industry growing by 8.0%, demonstrating the resilience of the economic recovery. However, downstream sectors of nickel (such as stainless steel and new energy) had not improved in tandem, and the macroeconomic benefits had failed to translate into nickel demand.

Supply side:

Ample supply at the mine end: Typhoon weather in the Philippines only briefly affected shipments, and the domestic trade price of nickel ore in Indonesia in November fell slightly to $14,998.67/ton, reflecting an overall ample supply at the mine end and weakened cost support.

Global inventories continued to accumulate: LME nickel inventories increased by 4,566 tons to 257,694 tons during the cycle, while domestic SHFE nickel inventories rose by 2,735 tons to 35,424 tons. The simultaneous increase in both domestic and international inventories highlighted the solidified oversupply situation in the global nickel market, directly suppressing any potential rebound in nickel prices.

Demand side:

Stainless steel demand was weak: Stainless steel social inventories were accumulating. On November 18th, the spot price of stainless steel from SunSirs was reported at 12,550 RMB/ton, down 1.95% during the cycle. Steel mills were unwilling to reduce production, while end-user consumption (construction, home appliances, etc.) had not shown any signs of improvement. The stainless steel market wa fluctuating and searching for a bottom, dragging down nickel demand.

The support from the new energy sector was weakening: the increasing penetration rate of lithium iron phosphate battery technology continued to squeeze the market for low- and medium-nickel ternary materials. Coupled with overseas tariff barriers restricting precursor exports, the demand growth momentum for nickel in the new energy sector was insufficient.

Market outlook

Nickel prices are expected to remain under pressure and trend downwards in the short term. With oversupply and inventory pressures unresolved, and no significant signs of improvement in demand, nickel prices may continue to decline.

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