Price trend

According to nickel price monitoring by SunSirs, nickel prices fluctuated downward in August; the price stood at 132,650 RMB/ton at the beginning of the month and edged down to 127,216.67 RMB/ton by the end of the month, marking an overall decline of 4.1% and a year-on-year increase of 5.47%.

Market analysis

On the macro front, August saw a mix of bullish and bearish factors that served as the primary drivers of nickel price volatility. Early in the month, the unexpected announcement by the U.S. Treasury Secretary regarding an expansion in the scale of long-term Treasury buybacks led to a sharp drop in Treasury yields and a weakening U.S. dollar; this boosted the non-ferrous metals sector overall, causing nickel prices to rise in tandem. However, the Federal Reserve simultaneously signaled a renewed hawkish stance, with multiple officials leaning toward interest rate hikes. With U.S. July PCE inflation coming in slightly above expectations at 3.7% year-on-year and Fed officials (such as Waller) adopting a hawkish tone at the Jackson Hole symposium, the market-implied probability of a September rate hike rose to nearly 60%, driving a notable increase in the U.S. Dollar Index and short-term Treasury yields. Domestically, China's Loan Prime Rate (LPR) remained unchanged in August, while the decline in fixed-asset investment for July remained significant, with the real estate sector continuing to act as a major drag.

Regarding supply, the market exhibits a divergent pattern characterized by a contraction in domestic output and an expansion in overseas supply. Domestically, Mysteel data indicates that China’s refined nickel production in August 2026 totaled 27,867 tonnes, down 9.48% month-on-month and 24.06% year-on-year; cumulative production for the January–August period stood at 264,577 tonnes, a year-on-year decline of 6.57%. Several smelters have reduced operating rates and output due to margin compression. Overseas, LME nickel inventories have continued to climb, reaching 268,488 tonnes by late August—nearing the 270,000-tonne mark. In Indonesia, the mid-year adjustment of RKAB quotas has entered a critical phase of negotiation; the ESDM has begun approving quota increase applications, with over a dozen companies receiving approval, and expectations of a marginal increase in supply continue to weigh on the market. At the ore level, actual transaction prices for 1.2% nickel ore hover around $28 per wet tonne, while the premium for pyrometallurgical-grade ore has narrowed to $2–$5.

On the demand side, overall demand remained weak in August, with downstream buyers limiting purchases to immediate needs. Regarding stainless steel, end-user demand was sluggish due to the traditional off-season, and downstream acceptance of high-priced material was limited. Social inventories of 300-series stainless steel rose to 586,000 tonnes; profit margins for 304 cold-rolled stainless steel turned negative, leaving steel mills facing cost-price inversion, while pre-stocking ahead of the "Golden September, Silver October" peak season failed to materialize as expected. In the new energy sector, production of ternary cathode materials reached 89,220 tonnes in July—a month-on-month increase of 2.48%—yet downstream purchasing interest remained weak, focused primarily on immediate requirements. The nickel sulfate market continued to operate on a "production-to-order" basis; battery manufacturers held ample inventories, and there was insufficient growth in new orders. Demand from the electroplating sector remained stable but limited in volume, making it unable to offset the overall market downturn.

Imports and Exports: In July 2026, China's imports of refined nickel totaled 20,942 tonnes, down 18% month-on-month and 45% year-on-year; exports amounted to just 598 tonnes, a decrease of 67% month-on-month and 96% year-on-year. Net imports for July stood at 20,344 tonnes, while cumulative net imports for January–July totaled approximately 158,000 tonnes (cumulative imports: 170,000 tonnes, up 26% year-on-year; cumulative exports: 13,000 tonnes, down 88% year-on-year).

Influencing Factors

The key factors influencing nickel prices in August can be categorized into three main themes. First, fluctuating macroeconomic expectations: a weakening US dollar alternated with rising expectations of interest rate hikes, causing the macroeconomic valuation baseline to first rise and then fall. Second, policy dynamics in Indonesia: news regarding RKAB quota adjustments frequently roiled the market; while expectations of a looser quota policy persisted, specific figures remained unclear. Third, the pressure of high inventories: LME nickel stocks remained elevated at 260,000–270,000 tonnes, and SHFE stocks exceeded 110,000 tonnes; these high visible inventory levels constrained the potential for a price rebound. Additionally, the volatile situation in the Middle East and sulfur prices—which eased from their highs but remained near $1,050/tonne—combined with the marginal weakening of cost support from MHP and high-grade nickel matte, created a complex landscape of conflicting bullish and bearish signals.

Market Outlook:

In summary, the nickel market in August was characterized by macroeconomic volatility, policy-driven dynamics, and weak conditions on both the supply and demand sides. Macroeconomically, the US dollar and interest rate hike expectations exerted conflicting pressures; on the supply side, domestic production cuts were offset by rising overseas inventories and growing expectations of relaxed Indonesian quotas; and on the demand side, neither the stainless steel nor the new energy sectors provided significant momentum. Driven by these three factors, nickel prices remained range-bound. Looking ahead to September, expectations of a Federal Reserve rate hike will continue to dampen risk appetite; the clarification of specific Indonesian RKAB quota volumes will serve as a critical variable; and the materialization of demand during the traditional "Golden September, Silver October" peak season will directly determine the price trajectory. Amidst ongoing macroeconomic headwinds and weak fundamentals, nickel prices are expected to remain range-bound with a downward bias in the short term; smelting costs around 125,000 RMB/ton provide a floor for prices, while high inventory levels and expectations of looser supply act as a cap on the upside.

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