Nickel prices experienced wide fluctuations after the holiday

Price trend: (October 1 – October 17) showed an “N”-shaped oscillation

According to the Business Society Commodity Market Analysis System, as of October 17, the spot price of electrolytic nickel was reported at 122,2583 yuan per ton, showing a 0.07% increase during the period and an 8.46% year-on-year decline. The market was primarily driven by the intense interplay between supply tightening expectations triggered by Indonesian policies and the reality of global overstocking represented by high inventory levels.
Price Drivers: The Tug-of-War Between Policy Expectations and Weak Fundamentals
After the holiday, Indonesia’s sudden shift in mining policy injected a strong boost into the market. The effective period for nickel mining quotas was significantly reduced from three years to one year, signaling the government’s strong reclamation of production control rights to stabilize nickel prices. This policy immediately triggered market concerns about tightening future supply, driving nickel prices up by 1.22% in the early post-holiday period.
However, weak fundamentals quickly overshadowed the stimulus effects of policies. Excessively high visible inventories globally, coupled with sluggish demand in traditional sectors such as stainless steel, led to a sharp rebound followed by a decline in prices, resulting in near-zero fluctuations throughout the entire cycle.
Supply side: Long-term concerns hard to resolve near-term surplus dilemma
1. Policy fluctuations emerge as the biggest variable: Although the new Indonesian policy did not immediately reduce current spot supply, by increasing the frequency of future quota approvals, it introduced uncertainty into medium- to long-term nickel supply, becoming a key factor supporting market sentiment.
2. Unprecedented Inventory Pressure: In stark contrast to policy concerns lies the harsh reality of severe inventory. Global visible inventories continue to accumulate, reaching record highs, with LME nickel inventories surging by 19,218 tons to 250,530 tons and SHFE inventories soaring by 2,225 tons to 27,042 tons. This massive inventory serves as the most direct evidence of supply glut, persistently constraining nickel prices from rising.
3. Clear Supply Growth Trend: According to Macquarie’s forecast, driven by a surge in Indonesian supply, the global nickel market will remain oversupplied for an extended period until 2030. Indonesia accounts for 70% of global production, and its substantial production capacity base along with sustained growth expectations are projected to reach 2.4-2.5 million tons by 2025, fundamentally limiting the long-term peak of nickel prices.
Demand Side: Weakness in Traditional Sectors Coexists with Prospects in New Energy
1. Weak demand support for stainless steel: As the primary consumption sector for nickel, the stainless steel market exhibits a pattern of “high production but weak inventory reduction.” Post-holiday social inventories have accumulated, with prices fluctuating weakly, indicating that end demand has not kept pace with supply, failing to effectively drive nickel prices. On October 17, the benchmark price for stainless steel on Business Society was 13,037.50 yuan per ton, down 0.13% from the beginning of the month.
2. The new energy sector offers long-term incremental growth: Positive factors stem from technological advancements. China has achieved significant breakthroughs in all-solid-state lithium metal battery technology, with the potential to double driving range. Solid-state batteries generally utilize high/ultra-high nickel ternary materials, and the clarity of this technological path outlines a broad growth trajectory for future nickel demand. Although large-scale commercial deployment is expected by 2026-2027, this long-term positive outlook provides crucial downside support for nickel prices.
Market Outlook: A mix of bullish and bearish sentiments, with wide fluctuations remaining the dominant trend

It is expected that nickel prices will continue to fluctuate widely in the short term, with a “top and bottom” pattern.
·The upward drive depends on the subsequent implementation of Indonesian policies, the replenishment demand of the new energy industry chain, and the fermentation of macroeconomic expectations of the Federal Reserve’s interest rate cuts.
·The downward pressure comes from the continued suppression of high global inventories, the realization of actual supply growth in Indonesia, and the weak consumption in the traditional stainless steel sector.