Price trend
According to data from SunSirs' nickel price monitoring, nickel prices fluctuated at a high level in January. At the beginning of the month, the price was 137,733.33 RMB/ton, and by the end of the month, it had risen slightly to 146,016.67 RMB/ton, representing an overall increase of 6.01% and a year-on-year increase of 17.27%.
Market analysis
Macroeconomic perspective: In January, the central bank lowered interest rates on structural monetary policy tools and increased quotas, clearly indicating a general direction of monetary easing and stating that there is still room for further reserve requirement ratio cuts and interest rate reductions. This provided liquidity support for the entire commodity market. The moderately loose monetary environment globally (especially in China) and the temporary weakening of the US dollar index enhanced the attractiveness of the non-ferrous metals sector. The influx of capital into the commodity market amplified the financial attributes of nickel, causing its price to react sharply in January to expectations regarding Indonesian policies, among other factors.
Supply side: The Indonesian government plans to set the nickel ore production quota (RKAB) for 2026 at 250-260 million tons, a significant reduction of approximately 34% compared to the 379 million tons in 2025. As the country supplying nearly 70% of the world's nickel resources, this move has sparked strong concerns in the market about a structural shortage in long-term supply. The Indonesian government has repeatedly stated its desire to stabilize nickel prices in the range of US$19,000-20,000 per ton to maximize the value of its resources. This marks a shift in its industrial strategy from the "rapid capacity expansion" of the past five years to a new phase of "proactive supply control and price support."
Demand side: Stainless steel demand was weak (accounting for 65%-70% of total demand), the industry was in its traditional off-season, and steel mills were experiencing losses, leading to reduced production and limited boost to nickel demand. The new energy sector was providing insufficient support (accounting for approximately 14% of demand): Lithium iron phosphate batteries continued to gain market share from ternary batteries, slowing down the growth of nickel demand in the battery sector. Other areas: Demand in traditional sectors such as electroplating and alloys remained stable, but their share was small and insufficient to drive overall demand.
Market outlook
In summary: In January, the nickel market underwent a dramatic restructuring of expectations under the impact of policy changes in Indonesia. The core logic of market trading has shifted from "oversupply reality" to "shortage expectations." In February, the market will enter the Lunar New Year holiday period and a "vacuum period" regarding the details of Indonesian policies. It is expected that both bulls and bears will continue to battle it out in the current high-price range, waiting for the final implementation of Indonesian quotas in March, which will provide new directional guidance for the market. Therefore, nickel prices are expected to remain volatile widely in February.
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