Nickel prices under pressure and decline

Market Overview (November 1-6)

According to the Business Society Commodity Market Analysis System, as of November 6, the spot electrolytic nickel price was quoted at 120,750 yuan per ton, down 1.21% on a weekly basis, reaching a three-month low and a year-on-year decline of 4.79%. While macroeconomic sentiment in the nickel market has improved, high inventory levels and weak end-demand continue to constrain prices.
Macro perspective:
The strengthening dollar suppresses metal prices: Internal policy disagreements within the Federal Reserve have raised doubts about the market’s expectations for a December rate cut. The U.S. dollar index surged past the 100 mark, hitting a three-month high, and broadly weighed down dollar-denominated non-ferrous metals.
The U.S.-China rapprochement boosted market sentiment: the U.S. canceled the 10% tariffs on Chinese goods and suspended the 24% retaliatory tariffs for one year, while also postponing Section 301 investigation measures targeting China’s maritime, logistics, and shipbuilding industries. These measures alleviated concerns about escalating trade tensions, providing short-term support to market sentiment.
Supply side:
Nickel ore supply remains tight, with cost support still present: Affected by the rainy season in the Philippines, nickel ore supply is tightening, and ore prices remain firm, providing some cost support for electrolytic nickel. Although the domestic benchmark price for nickel in Indonesia in November (Phase I) was slightly adjusted downward by 0.44%, this adjustment may reflect market expectations of weak nickel demand, which could temporarily dampen the upward momentum of nickel prices.
Global inventories continue to accumulate, with significant oversupply pressure: LME nickel inventories rose by 1,002 tons to 253,104 tons during the cycle, while domestic Shanghai nickel inventories increased by 1,301 tons to 32,689 tons during the same period. The simultaneous rise in both domestic and international inventories reflects that the oversupply situation remains unimproved, continuing to suppress nickel prices.
Demand side:
The stainless steel market operates under pressure: overall production scheduling remains high, but end-user demand has not shown significant improvement. To alleviate inventory pressure, companies are reducing prices to boost shipments, leading to fluctuating and weakening prices. On November 6, the spot price of stainless steel was reported at 12,800 yuan/ton, down 0.78% from the beginning of the month. In November, domestic stainless steel crude steel production plans decreased by 2.06% month-on-month, further weakening support for nickel raw material demand.
Marginal weakening in new energy demand: The production of ternary cathode precursors is expected to decrease by 8% month-on-month to 85,000 tons in November, reflecting a slowdown in the demand for nickel raw materials in the battery power industry chain and a diminished driving effect of the new energy sector on nickel prices.
Market Outlook:
Although the easing of Sino-U.S. relations has brought macroeconomic benefits and somewhat alleviated market pessimism, the fundamentals of the nickel market remain weak. While supply is supported by mineral prices, global inventories continue to accumulate. Coupled with simultaneous weakening demand from the two major downstream sectors—stainless steel and new energy—the upside potential for nickel prices is limited. Short-term nickel prices are expected to remain volatile, requiring close monitoring of inventory drawdown progress and signals of actual downstream consumption recovery.