**Core View: Volatile with Bullish Bias** The Indonesian Ministry of Energy and Mineral Resources has suspended the IUP mining permits of over 50 mining companies (including 34 nickel projects) for failing to submit their 2026 RKAB (Work Plan and Budget) applications on time. This compliance crackdown has heightened market concerns over nickel ore supply, limiting the potential for further price declines. Concurrently, persistently high sulfur prices are increasing the costs for high-pressure acid leach (HPAL) operations, providing strong support for refined nickel prices.
From a fundamental perspective, sulfur shortages are transmitting through the supply chain, leading to reduced MHP production in Indonesia, which may directly impact refined nickel output. Indonesian NPI production faces dual constraints from power limitations and tightening quotas, intensifying expectations for output cuts. Current market sentiment aligns with these fundamentals, with the industry trend remaining positive. The focus is on the sustainability of this sentiment and the realization of positive feedback from production cuts.
**Nickel Ore Prices: Bearish** As of May 18, the CIF prices for Philippine Ni0.9% and Ni1.5% laterite nickel ore were $34.5/wmt and $67/wmt, respectively, unchanged and down $3 week-on-week.
**Indonesian Domestic Nickel Ore: Bullish** As of May 18, the delivered prices for Indonesian domestic Ni1.2% and Ni1.6% nickel ore were $30.5/wmt and $79.3/wmt, respectively, unchanged and up $3.3 week-on-week.
**Freight Rates: Neutral** Last week, freight rates from the Philippines to Tianjin Port and Lianyungang Port remained flat at $15.25/wmt and $14.75/wmt, respectively.
**Sulfur Prices: Neutral** According to SMM data, as of May 18, the Indonesian sulfur CIF price was $1,175/ton, unchanged from the previous week.
**Refined Nickel Production: Bullish** As of April 2026, China's monthly electrolytic nickel production was 37,100 tons, down 1,300 tons month-on-month, a decrease of 3.39% but an increase of 2.2% year-on-year.
**Refined Nickel Inventory (SMM): Bearish** Last week, social inventories of refined nickel (including SHFE) increased by 10,300 tons to 111,600 tons, up 10.19% week-on-week.
**Domestic NPI Price: Bearish** As of May 18, the average price for 8-12% high-grade nickel pig iron was 1,126 yuan/Ni, down 5 yuan/Ni week-on-week.
**Nickel Iron Production: Bullish** As of April 2026, Indonesian nickel pig iron production was 130,300 nickel tons, down 4,400 nickel tons month-on-month, a decrease of 3.27%.
**Nickel Sulfate Production: Bearish** As of April 2026, China's monthly nickel sulfate production was 35,600 nickel tons, up 495 tons month-on-month, an increase of 1.41%.
**Stainless Steel Production Schedule: Bearish** The estimated production schedule for China's stainless steel crude steel in May 2026 is 3.7556 million tons, up 0.63% month-on-month and 8.45% year-on-year.
**Stainless Steel Social Inventory: Bullish** As of May 15, stainless steel social inventories were 1.1348 million tons, down 10,400 tons week-on-week, a decrease of 0.91%.
**Stainless Steel Cost: Bearish** As of May 15, the production cost for Chinese 304 cold-rolled stainless steel was 14,674 yuan/ton, down 34 yuan/ton week-on-week, a decrease of 0.23%.
**Weekly Summary** **Ore Sector:** The rainy season in the Philippines' main producing areas has largely ended, leading to a gradual recovery in nickel ore supply. In Indonesia, tightening mining quotas are keeping ore prices generally elevated. Although the new HPM formula now includes iron, cobalt, and chromium in pricing, significantly raising the theoretical benchmark, most smelters currently reject the new premium, sticking to fixed prices or the "HPM + $7-10 premium" pricing mechanism. **NPI Sector:** NPI prices remain in a high-volatility pattern, but last week, shifting market sentiment, weaker downstream stainless steel prices, and cautious procurement have marginally weakened producers' willingness to support prices. **Nickel Sulfate Sector:** Rising raw material prices have strengthened cost support. Downstream precursor companies' expected May production schedules are recovering, increasing restocking demand, suggesting nickel salt prices may continue their strong trend. **Demand Side:** The stainless steel market faces pressure at high levels, with marginal easing in nickel and chromium raw material prices, resulting in limited overall supply-demand improvement. Current mill profits have seen some recovery, and May production schedules continue to increase. Focus remains on raw material price trends and stainless steel inventory changes.
Overall, news of the Indonesian permit suspensions has exacerbated supply concerns, limiting downside for ore prices. High sulfur prices are bolstering HPAL costs, supporting refined nickel. Fundamentally, sulfur shortages are causing Indonesian MHP production cuts, potentially dragging on refined nickel output. Indonesian NPI production is pressured by power constraints and quotas, raising expectations for reductions. Market sentiment and fundamentals are in sync, with a positive industry trend. The key is monitoring sentiment persistence and the materialization of production cut feedback.
**Nickel Prices Experience Volatile Decline** **Industry News Update** The Indonesian Ministry of Energy and Mineral Resources (ESDM) has frozen the IUP permits of over 50 mining companies that failed to submit their 2026 RKABs. Affected companies have a 90-day grace period to comply; otherwise, their permits may be permanently revoked.
According to SMM, since March-April 2026, some Indonesian high-NPI production lines have entered maintenance and reduced output due to insufficient nickel ore supply and high costs. Coupled with the commissioning of electrolytic aluminum capacity in industrial parks, power resource allocation is expected to keep 10-15% of existing high-NPI capacity in the IWIP industrial park under rotational maintenance in the coming months, limiting short-term supply recovery.
Huayou Cobalt announced that due to a significant rise in sulfur prices and prolonged high-load operation since production began, its Huafei Nickel-Cobalt unit will undergo temporary maintenance from May 1, 2026, affecting approximately 50% of its output.
According to Mysteel research, a steel mill in South China purchased high-nickel iron at 1,150 yuan/Ni (delivered, tax-included) on April 28, with a transaction volume of several thousand tons. Market feedback indicates that declining ore grades are reducing NPI output grades, with some projects' NPI grades dropping to around 11%, widening the premium for high-grade NPI. Consequently, Indonesian stainless steel projects plan to purchase granulated nickel to address the shortage of high-grade NPI.
The Weda Bay nickel mine is scheduled to enter maintenance in May. Limited by RKAB quota restrictions, its Q1 2026 nickel ore sales were only 9 million wet tons (against an approved 2026 RKAB quota of 12 million wet tons). The company has applied for a quota increase and plans to seek further increases after the HPAL facility in the IWIP industrial park becomes operational.
**Futures Experience Volatile Correction** Last week, the SHFE nickel main contract opened at 147,300 yuan/ton and closed at 143,330 yuan/ton, with a weekly high of 149,350 yuan/ton and a low of 142,260 yuan/ton, falling 2.13% for the week.
**Spot Discounts Narrow** As of May 18, the spot price for electrolytic nickel was 142,850 yuan/ton, down 5,450 yuan/ton week-on-week, a decrease of 3.67%.
As of May 18, Jinchuan nickel price was 143,850 yuan/ton, down 5,350 yuan/ton week-on-week, a decrease of 3.59%; the Jinchuan nickel premium was 1,550 yuan/ton, up 350 yuan/ton week-on-week.
As of May 18, the imported nickel price was 141,950 yuan/ton, down 5,450 yuan/ton week-on-week, a decrease of 3.70%; the imported nickel premium was -350 yuan/ton, up 250 yuan/ton week-on-week.
**Import Window Closed** As of May 15, the LME nickel price was $18,580/ton, down $365/ton week-on-week, a decrease of 1.93%; the LME nickel cash-to-3-month discount was -$192.57/ton, widening by $7.84/ton week-on-week.
As of May 18, the import arbitrage for electrolytic nickel was -594.9 yuan/ton, down 495.55 yuan/ton week-on-week; the export arbitrage was -$360.47/ton, up $12.2/ton week-on-week.
**Nickel Iron Prices Consolidate at High Levels** As of May 18, the average price for 8-12% high-grade nickel pig iron was 1,126 yuan/Ni, down 5 yuan/Ni week-on-week; the premium of high-grade NPI over electrolytic nickel was -284 yuan/Ni, up 21.5 yuan/Ni week-on-week.
As of May 18, the average price for battery-grade nickel sulfate was 34,100 yuan/ton, down 220 yuan/ton week-on-week; the average price for plating-grade nickel sulfate was 37,000 yuan/ton, up 1,000 yuan/ton week-on-week. The premium of battery-grade nickel sulfate over primary nickel plate was 13,050 yuan/ton, up 4,450 yuan/ton week-on-week.
**Nickel Ore: Prices Under Adjustment Pressure** **Ore Prices Mixed** As of May 18, CIF prices for Philippine Ni0.9% and Ni1.5% laterite nickel ore were $34.5/wmt and $67/wmt, respectively, unchanged and down $3 week-on-week. Philippine nickel ore faces downward pressure as supply increases post-rainy season. Freight rates from the Philippines to Tianjin and Lianyungang remained flat at $15.25/wmt and $14.75/wmt, respectively.
As of May 18, delivered prices for Indonesian domestic Ni1.2% and Ni1.6% nickel ore were $30.5/wmt and $79.3/wmt, respectively, unchanged and up $3.3 week-on-week. Pyrometallurgical ore supply is tight. Smelters primarily use fixed prices or the "HPM + $7-10 premium" model. Some are implementing a unified benchmark for pyrometallurgical ore (Co 0.05%, Fe 20%, Cr 1%), regardless of actual mine output variations. Additionally, composition incentives in the market have shrunk to minimal levels, mostly incorporated into the premium.
**Port Inventories Rebound** As of May 15, nickel ore port inventories were 4.55 million wet tons, up 150,000 tons week-on-week, an increase of 3.41%. On the demand side, while NPI prices rose overall last week, smelters continue to pressure raw material suppliers on price. To reduce inventory and maintain trade flow, ore sellers are expected to make concessions in subsequent offers.
According to customs data, China's nickel ore imports in March 2026 were 1.6319 million tons, up 33.34% month-on-month and 6.30% year-on-year. Imports from the Philippines accounted for 1.3932 million tons, or 85.37% of the total. Cumulative imports for January-March 2026 were 4.24 million tons, up 18.0% year-on-year.
**MHP Production Declines Year-on-Year** As of May 18, the MHP FOB price was $17,262/ton, down $295/ton week-on-week, a decrease of 1.68%; the high-ice nickel FOB price was $17,563/ton, up $8/ton week-on-week, an increase of 0.05%.
According to SMM, Indonesian MHP production in April 2026 was 33,900 tons, down 900 tons month-on-month, a decrease of 2.59%; Indonesian high-ice nickel production was 30,100 tons, down 400 tons month-on-month, a decrease of 1.31%. Due to tight sulfur supply, MHP production is expected to decline further in May.
In March 2026, MHP imports were 171,200 tons, up 37.49% month-on-month and 1.46% year-on-year; high-ice nickel imports were 63,600 tons, down 2.33% month-on-month but up 61.82% year-on-year.
**Refined Nickel: Supply Pressure Persists** **Refined Nickel: Supply Remains High** As of April 2026, China's monthly electrolytic nickel production was 37,100 tons, down 1,300 tons month-on-month, a decrease of 3.39% but an increase of 2.2% year-on-year.
In March 2026, China's refined nickel imports were 19,200 tons, up 13.16% month-on-month and 129.98% year-on-year. Cumulative imports for January-March 2026 were 58,200 tons, up 40.11% year-on-year.
In March 2026, China's refined nickel exports were 2,511 tons, up 15.40% month-on-month but down 82.71% year-on-year. Cumulative exports for January-March 2026 were 8,591 tons, down 82.97% year-on-year.
**Refined Nickel: Inventory Accumulation Accelerates** As of May 18, SHFE nickel warehouse receipts were 78,600 tons, up 8,182 tons week-on-week, an increase of 11.63%. LME nickel warehouse receipts were 275,600 tons, down 1,278 tons week-on-week, a decrease of 0.46%.
Last week, social inventories of refined nickel (including SHFE) were 111,600 tons, up 10,300 tons week-on-week, an increase of 10.19%. East China social inventories increased by 2,114 tons to 31,700 tons, while Shanghai bonded area inventories remained flat at 1,700 tons.
**Refined Nickel: Costs Rise Significantly** As of April 2026, according to SMM data, the integrated production costs for electrowinning nickel from MHP and high-ice nickel were 159,018 yuan/ton and 150,956 yuan/ton, up 39,200 yuan and 2,961 yuan/ton month-on-month, respectively. The profit margins for integrated electrowinning nickel from MHP and high-ice nickel were -21.6% and -17.4%, down 30.7 and 5.7 percentage points month-on-month, respectively. The significant cost increase for hydrometallurgical processes is mainly due to the rise in Indonesian sulfur transaction prices from $540/ton in early March to $1,175/ton.
**Nickel Sulfate: Price Center Shifts Upward** **Nickel Sulfate: Production Remains Stable** As of April 2026, China's monthly nickel sulfate production was 35,600 nickel tons, up 495 tons month-on-month, an increase of 1.41%.
In March 2026, China's nickel sulfate imports were 29,700 tons, up 17.4% month-on-month and 61.5% year-on-year. Cumulative imports for January-March 2026 were 86,700 tons, up 77.4% year-on-year.
**Nickel Sulfate: Strong Cost Support** MHP coefficients and auxiliary material prices remain high, with some producers facing high immediate costs, keeping nickel salt quotations elevated. Inventory-wise, the upstream nickel salt plant inventory index rose from 5.6 days to 8.2 days this week, while the downstream precursor plant inventory index fell from 10 days to 9.6 days; the integrated enterprise inventory index remained at 6.8 days. In terms of trading sentiment, the upstream nickel salt plant sales sentiment factor remained at 2.0 this week, while the downstream precursor plant procurement sentiment factor fell from 2.6 to 2.5, and the integrated enterprise sentiment factor fell from 2.6 to 2.4.
As of May 18, the profit margins for producing nickel sulfate from MHP, nickel briquettes, high-ice nickel, and speiss were 0.3%, 1.8%, 4%, and -0.4%, up 1.9, 3.5, 0.3, and 2.8 percentage points week-on-week, respectively.
**Nickel Iron: Prices Remain High** **Nickel Pig Iron: Production Slightly Declines** As of April 2026, Chinese nickel pig iron production (metal content) was 27,600 nickel tons, down 400 tons month-on-month, a decrease of 1.39%.
As of April 2026, Indonesian nickel pig iron production was 130,300 nickel tons, down 4,400 nickel tons month-on-month, a decrease of 3.27%.
According to customs data, China's nickel iron imports in March 2026 were 823,000 tons (metal equivalent 97,700 tons), down 1.0% month-on-month and 18.7% year-on-year. Cumulative imports for January-March 2026 were 2.565 million tons, down 10.0% year-on-year.
**Nickel Pig Iron: Profit Margins Improve** As of May 15, the production costs for nickel pig iron in Indonesian regions of Konawe, Morowali, and others were 1,101 yuan/Ni, 971 yuan/Ni, and 1,109 yuan/Ni, down 3, 2, and 2 yuan/Ni week-on-week, respectively. Indonesian nickel iron production profit margins were 3.1%, 16.9%, and 2.4%, up 0.7, 0.8, and 0.7 percentage points week-on-week, respectively.
**Stainless Steel: Fundamentals Weak** **Stainless Steel: Futures Under Downward Pressure** Last week, the SHFE stainless steel main contract opened at 15,200 yuan/ton and closed at 14,835 yuan/ton, with a weekly high of 15,275 yuan/ton and a low of 14,760 yuan/ton, falling 1.98% for the week.
As of May 18, the Wuxi quoted price for 304/2B coil (mill edge) was 15,225 yuan/ton, down 225 yuan/ton week-on-week, a decrease of 1.46%.
**Stainless Steel: Significant Supply Pressure** According to Mysteel statistics, China's estimated stainless steel crude steel production schedule for May 2026 is 3.7556 million tons, up 0.63% month-on-month and 8.45% year-on-year.
Breakdown: 200 series: 1.0325 million tons, down 5.58% month-on-month, up 5.78% year-on-year; 300 series: 2.0476 million tons, up 4.36% month-on-month, up 14.73% year-on-year; 400 series: 675,500 tons, down 0.15% month-on-month, down 3.79% year-on-year.
In March 2026, China's stainless steel imports were 136,200 tons, up 24.72% month-on-month and 5.71% year-on-year; exports were 310,200 tons, up 19.29% month-on-month but down 34.09% year-on-year.
Cumulative imports for January-March 2026 were 408,300 tons, down 9.44% year-on-year; cumulative exports were 794,800 tons, down 35.17% year-on-year.
**Stainless Steel: Warehouse Receipts Increase** As of May 15, stainless steel social inventories were 1.1348 million tons, down 10,400 tons week-on-week, a decrease of 0.91%. 300 series inventories were 689,000 tons, down 3,000 tons week-on-week, a decrease of 0.43%.
As of May 18, stainless steel warehouse receipt volume was 70,300 tons, up 6,200 tons week-on-week, an increase of 9.67%.
**Stainless Steel: Immediate Profits Favorable** As of May 15, the production cost for Chinese 304 cold-rolled stainless steel was 14,674 yuan/ton, down 34 yuan/ton week-on-week, a decrease of 0.23%.
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