Price trend

According to the nickel price monitoring by SunSirs, nickel prices fluctuated and declined last week. As of the end of the week, the spot nickel price was 136,250 RMB/ton, a decrease of 2.78% compared to the beginning of the week, and an increase of 7.26% year-on-year.

According to the weekly price fluctuation chart from SunSirs, over the past 12 weeks, nickel prices have fallen for 4 weeks and risen for 8 weeks, with a slight correction from recent highs.

Analysis of the reasons for the price increase

Macroeconomic perspective: U.S. employment and inflation continued to slow, but some sectors improved due to the boost from the Federal Reserve's interest rate cuts. The Federal Reserve remained divided on how to weigh employment against inflation targets in the future and is likely to remain cautious in the short term.

Supply side: Several manufacturers that reduced production in the fourth quarter of last year saw a significant increase in output in January. This, coupled with continued arrivals of overseas resources and relatively lower prices for Indonesian resources, resulted in ample overall spot supply. Consequently, downstream companies were not in a hurry to stock up and primarily purchased according to their production schedules. China's refined nickel production in January was 37,700 tons, a 20.06% increase month-on-month and a 25.54% increase year-on-year.

Demand side: Overall demand from the electroplating downstream sector remained relatively stable, with little prospect of growth in the future; alloy demand still accounted for the majority, with strong demand from the military and shipbuilding sectors. Companies were buying on dips, and the emphasis on defense spending during the "Two Sessions" is a positive factor in the medium to long term. During the off-season, terminal demand for stainless steel was not strong enough to provide a significant boost, and steel mills still had some raw material inventory from before, maintaining a wait-and-see attitude towards rising raw material prices; downstream ternary battery manufacturers had some rigid demand due to export orders and pre-holiday stockpiling, but the purchase volume of nickel sulfate remained low, and downstream companies had limited acceptance of high prices. Prices are expected to remain volatile.

Market outlook

In summary, the off-season has seen insufficient improvement in stainless steel end-user demand, and steel mills still have some raw material inventory from before, leading them to maintain a wait-and-see attitude towards rising raw material prices.  Downstream ternary battery manufacturers have some rigid demand due to export orders and pre-holiday stockpiling, but the purchase volume of nickel sulfate remains relatively low. Domestic exports are hindered, and social inventories continue to accumulate, with the price difference between domestic and international markets narrowing recently. Overall, recent changes in macroeconomic sentiment and expectations regarding the mining sector are influencing the overall fluctuation rhythm of nickel prices. The macroeconomic situation is currently stable, and until the disruptions in the mining sector are resolved, prices will remain supported. Nickel prices are expected to fluctuate within a wide range, mainly driven by adjustments in the stainless steel market.

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