According to Xinhua Finance, following the sustained decline in molybdenum iron prices, nickel iron prices have also entered a downward channel recently. Against this backdrop, leading steel mills proactively cutting stainless steel prices has further fueled market concerns. Currently, the downward trend in nickel iron prices shows no signs of abating, and stainless steel prices are likely to remain under pressure in the short term.

Supply-Demand Dynamics Weigh on Nickel Prices, Making Them “Teetering on the Brink”

The core driver behind nickel's decline stems from a fundamental shift in supply-demand dynamics. On the supply side, both China and Indonesia are expanding their pure nickel production capacity. From January to October 2025, China's cumulative refined nickel output reached 350,600 metric tons, a 35.63% year-on-year increase. Although production schedules have been reduced due to declining corporate enthusiasm amid falling prices, the upward trend in year-on-year growth remains unaltered. This supply pressure leaves little room for a near-term rebound in nickel prices.

Indonesia, a key engine of global nickel supply, has approved an RKAB mining quota of 364 million wet tons for 2025—a 22% increase from the beginning of the year. Assuming an 85% mining efficiency rate, actual supply will reach 300 million wet tons, far exceeding the market demand of 260 million wet tons. This oversupply has directly led to a substantial accumulation of global nickel inventories, with LME nickel stocks nearing their 2021 peak, exerting strong downward pressure on prices. The persistent downward trend in nickel prices continues to weigh on the stainless steel market.

Weakening Costs and Uncertain Steel Procurement Spark Concerns

From an industrial chain perspective, the long-term high correlation between nickel and stainless steel dictates the inevitability of cost pass-through. However, the prolonged delay in announcing nickel iron procurement prices by leading steel mills has fueled bearish sentiment among traders, pushing nickel iron prices down to around 900 yuan per nickel. Taking 304 stainless steel as an example, conventional 304 grades contain approximately 8%-10% nickel. Nickel iron accounts for over 50% of stainless steel production costs. Consequently, downward pressure on nickel iron at the raw material level makes it even harder for stainless steel to rebound. The transmission path of “nickel iron leading, stainless steel following” has made market sentiment excessively cautious.

Despite falling nickel prices, the stainless steel industry has not benefited from reduced costs due to weak demand intensifying market pressures. Beyond domestic supply pressures from existing capacity, the influx of stainless steel from overseas production expansions has further strained the domestic market, limiting opportunities for price increases. Customs data shows that stainless steel sheet imports reached 763,700 metric tons in the first three quarters of 2025, up 39,300 metric tons or 5.43% year-on-year. With Indonesia's stainless steel capacity continuing to expand, the market anticipates accelerated overseas stainless steel inflows in the fourth quarter, further straining domestic supply.

The rigid expansion on the supply side stands in stark contrast to sluggish demand: Real estate, a core consumption sector for stainless steel, shows no clear improvement in its investment decline, dragging down downstream demand in construction decoration and pipe manufacturing. Although home appliance production continues to grow, it struggles to offset the overall demand gap. This supply-demand imbalance has driven stainless steel prices lower. In early November, guidance was issued for mills to lift price caps, followed by mid-month price cuts of 200 yuan/ton, both fueling cautious market sentiment.

Stainless Steel Enterprises Under Operational Pressure

Industry players face dual challenges of shrinking profits and mounting operational pressures. Since the start of 2024, stainless steel enterprises have seen continuous profit declines, with most recently operating at a loss for extended periods. While falling nickel prices have reduced raw material costs, mills have been forced to sell at depressed prices to alleviate inventory pressures. Simultaneously, they are passing on cost pressures to downstream raw material suppliers, intensifying downward pressure on nickel iron prices.

Overall, the formation of nickel's downward price channel and the sustained pressure on the stainless steel industry stem fundamentally from the combined effects of global supply chain restructuring, supply-demand dynamics adjustments, and macroeconomic conditions. Future focus should be on monitoring policy shifts in Indonesia's nickel ore sector, the pace of global inventory drawdowns, and the strength of domestic demand recovery. Companies should respond to market volatility by optimizing raw material procurement strategies, adjusting product portfolios, and expanding into high-value-added markets.

Looking ahead, nickel prices are likely to extend their decline, with bottom support potentially falling to around CNY 100,000/ton. Although domestic refined nickel producers have slightly reduced operations amid narrowing margins, overseas refined nickel output has stepped in to compensate, leaving limited room for price rebounds. With nickel prices remaining depressed, the stainless steel market faces a scenario of “weakening cost support coupled with limited marginal demand improvement.” The supply-strong, demand-weak dynamic is unlikely to reverse in the short term, maintaining downward pressure on prices.

As an integrated internet platform providing benchmark prices, on November 24, the benchmark price of nickel onSunSirs was 117,050.00 RMB/ton, a decrease of 4.24% compared with the beginning of the month (122,233.33 RMB/ton).

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