Key takeaways on fundamentals.
Supply: Philippine ore shipments remain elevated; Indonesian high-grade nickel matte output is surging while MHP recovery lags; NPI rises, refined nickel slows, and nickel sulfate grows rapidly.
Demand: Ternary materials are growing from a small base; the stainless steel peak season is underperforming, with 300-series mills operating at a loss and purchasing only on a need-to basis.
Costs: NPI, stainless steel, and electrowinning nickel are all loss-making, providing strong cost support.
Outlook: Oversupply persists with range-bound trading; high inventories and weak demand cap the upside while costs provide a floor; expected range of 120,000 to 142,000 yuan per tonne.
Risks: Indonesian drought conditions, mining policy shifts, stainless steel production cuts, and overseas interest rate movements.
Supply side: Philippine nickel ore shipments remain at high levels, with clear divergence across smelting segments. Indonesian pyrometallurgical high-grade nickel matte output maintains high growth, but constrained by sulfur and other raw materials, Indonesian MHP output recovery has fallen short of expectations. Domestic smelting: reduced Indonesian supplement volumes have led to higher domestic NPI output; refined nickel production growth has slowed markedly due to losses; with production tied to sales, domestic nickel sulfate output maintains growth exceeding 30%.
Demand side: In the new energy segment, ternary cathode material and precursor output maintain year-on-year growth, showing resilience in battery nickel consumption, but the small base limits the incremental pull. On the traditional consumption side, the stainless steel "Golden September" peak season has underperformed expectations, 300-series smelting has fallen into losses, mills are controlling production and destocking, raw material procurement is mainly need-based, and willingness to actively restock is insufficient, continuously weighing on nickel feedstock.
Cost and profit: Across the traditional industrial chain, NPI and stainless steel have already recorded varying degrees of losses; electrowinning nickel smelting is also in a loss-making state, and cost support across the supply chain is gradually strengthening.
Core view: Looking ahead to the fourth quarter, the nickel market is expected to continue its range-bound oscillation pattern. The global refined nickel oversupply situation has not yet reversed, with the upside capped by high inventories and weak stainless steel end-user demand, while the downside is supported by Indonesian mining costs and smelting losses. Overall, absent large-scale substantive production cuts on the supply side, supply disruptions are more likely to generate pulse-like moves rather than drive a trend of one-directional gains. The expected dense trading range for nickel prices in the fourth quarter is 120,000 to 142,000 yuan per tonne. Risk points: the persistence of El Nino-driven drought in Indonesia, changes in Indonesian mining policy, the extent of self-rescue production cuts in stainless steel, and overseas macroeconomic interest rate volatility.
Third-Quarter 2026 Nickel Market Review
Nickel futures trend: price center shifts lower. In the third quarter, both domestic and international nickel futures displayed range-bound trading overall, with the LME three-month contract trading between $15,700 and $17,300 per tonne and the SHFE nickel main contract ranging from 120,500 to 131,500 yuan per tonne. In July and August, under pressure from high inventories, weak downstream demand, and expectations of marginal supply easing following the restart of the Weda Bay nickel mine, the price center oscillated lower as the market traded the reality of loose supply. Entering September, driven by macro factors, prices once again touched the year's low near 120,000 yuan per tonne before the market's trading focus began to shift. Indonesian El Nino drought risks quickly escalated, with water shortages disrupting industrial parks including IMIP and BMS/Luwu in Indonesia, raising the risk of production cuts in hydrometallurgical smelting and driving a pulse-like rebound. However, global visible nickel inventories remain at historically high levels, and the domestic stainless steel "Golden September" peak season has underperformed, with mills mostly maintaining need-based procurement. This weak consumption reality constrained the rebound height. With the drought not yet translating into large-scale substantive production cuts and amid macro pressure from a strengthening dollar, the market maintained bottom-range oscillation.
Figure 1.1: SHFE & LME nickel prices. Spot market: domestic futures-spot basis fluctuated in phases driven by events. Figure 1.2: Domestic spot premium/discount. Figure 1.3: LME 3M premium/discount (USD). Figure 1.4: Import profit/loss. Figure 1.5: Export profit/loss. In the third quarter, LME and domestic spot premiums remained broadly stable overall, with the LME cash discount staying within $200 per tonne. The domestic futures-spot basis fluctuated in phases driven by events. As the price center shifted lower, imported nickel and nickel briquettes currently maintain a premium status. The import profit window remained closed throughout the third quarter, but Indonesian refined nickel flowing back for SHFE delivery is not subject to import profit/loss constraints, keeping domestic import volumes at relatively high levels.
Nickel Market Fundamentals: Supply-Side Analysis
Nickel ore: Indonesian nickel ore supply is relatively loose, and Indonesian nickel ore HPM quotations have declined. Figure 2.1: Nickel ore import data (10,000 tonnes). Figure 2.2: Nickel ore import data seasonal chart (million tonnes). Figure 2.3: Philippine-to-Indonesia nickel ore shipments (tonnes). Figure 2.4: Domestic nickel ore port inventory (10,000 tonnes). According to China Customs data, August 2026 nickel ore imports totaled 5.9648 million tonnes, up 32,000 tonnes month-on-month, a gain of 0.54%, and down 381,900 tonnes year-on-year, a decline of 6.02%. Of this, laterite nickel ore accounted for 5.9231 million tonnes and nickel sulfide ore 41,700 tonnes. Laterite nickel ore imports from the Philippines reached 5.5257 million tonnes, accounting for 92.64% of the month's imports. Total nickel ore imports for January-August reached 31.6217 million tonnes, up 21.00% year-on-year. From January to August, cumulative Philippine-to-Indonesia nickel ore shipments reached 11.8373 million tonnes, up 55.17% year-on-year. Entering September, as of September 21, 79 nickel ore vessels loaded and departed from the Philippines with shipments of 4.2378 million wet tonnes; of these, 59 vessels went to China with 3.1593 million wet tonnes, and 20 vessels went to Indonesia with 1.078 million wet tonnes. Currently, Indonesian nickel ore supply is relatively loose. In January-May, Indonesia's domestic nickel ore RKAB approval quota was limited, ore supply was tight, the local nickel ore domestic trade benchmark price was raised, and spot premiums continued to rise. The second May quotation rose to the highest point. Taking 1.6% grade nickel ore as an example, the second May domestic trade ore HPM quotation was $70.83 per wet tonne with a domestic trade premium of $8.5 per wet tonne. Currently, the domestic trade HPM quotation has fallen back to $63.2 per wet tonne with a domestic trade premium of $0 per wet tonne. After July, Indonesia's full-year nickel ore RKAB approval quota remained at 260-270 million tonnes, with no nationwide total expansion. Revisions only involve selective small supplementary additions for captive mines of local smelters that genuinely face feedstock gaps, without opening up general production increases, and the overall scale of new quotas is limited. The Weda Bay nickel mine, which had previously suspended production due to exhausted ore quotas, has now resumed operations, though no approved ore quota has been publicly disclosed. We continue to believe that in the long cycle, Indonesian local nickel ore grades are declining year by year, and there is a need to protect and rationally exploit nickel ore resources. Tightening is the general trend, but policy adjustments mainly reference Indonesia's actual local demand and market prices. In mid-September, Indonesia revised its metal mineral sales benchmark price (HPM) guidelines, focusing on adjusting calculation formulas for nickel ore and derivative products. Under the new rules, nickel ore HPM comprehensively considers nickel grade, reference ore prices, and associated iron, cobalt, and chromium elements, adjusted by moisture content. At 1.6% nickel grade, the correction coefficient is 30%, adjusting by 1% for every 0.1% change in grade; the associated iron CF is 30%, and cobalt and chromium CF are set by grade tiers. It also clarifies HPM calculation parameters for products including Feronickel, MHP, and NPI, such as Feronickel CF at 95%, and nickel and cobalt CF in MHP at 60% and 100% respectively. This adjustment mainly affects low-grade ore within 1.2% grade. Taking 1.2% grade ore as an example, the first Indonesian domestic trade ore HPM quotation in early September was $45.65 per wet tonne. After adjustment, the second quotation in mid-September was lowered to $24.89 per wet tonne, but the actual domestic trade delivered price for this grade is currently $27 per wet tonne. At the same actual transaction price, tax expenses are reduced, which helps low-grade mines restore profitability. However, for hydrometallurgical smelting, the tax reduction is difficult to immediately transmit to short-term procurement costs, serving only to increase bargaining leverage for future price negotiations.
NPI: Indonesian output contracts while domestic supplementary increases are limited. Figure 2.5: Domestic NPI output (10,000 nickel metal tonnes). Figure 2.6: Indonesian NPI output (10,000 nickel metal tonnes). According to SMM data, August national nickel pig iron output was 32,130 nickel tonnes, or 702,300 physical tonnes, with physical volume up 9.34% month-on-month and metal content up 7.42% month-on-month. January-August national NPI cumulative output was 222,900 nickel metal tonnes, up 8.59% year-on-year. August Indonesian NPI output was 135,100 nickel metal tonnes, with metal content up 0.04% month-on-month and down 0.02% year-on-year. January-August cumulative output was 1,034,100 nickel metal tonnes, down 7.06% year-on-year. Figure 2.7: NPI import volume (physical tonnes). Figure 2.8: NPI import volume by country (10,000 tonnes). According to China Customs data, August China NPI imports were 961,000 tonnes, up 320,000 tonnes month-on-month, a gain of 49.9%, and up 87,000 tonnes year-on-year, a gain of 10.0%. Of this, August China NPI imports from Indonesia were 932,000 tonnes, up 318,000 tonnes month-on-month, a gain of 51.8%, and up 82,000 tonnes year-on-year, a gain of 9.6%. January-August China NPI cumulative imports were 6.683 million tonnes, down 584,000 tonnes year-on-year, a decline of 8.0%. Of this, NPI imports from Indonesia were 6.447 million tonnes, down 640,000 tonnes year-on-year, a decline of 9.0%. Figure 2.9: Domestic NPI inventory (10,000 tonnes). Since the start of this year, due to tight Indonesian nickel ore supply, some capacity has switched to nickel matte, NPI output has declined, and the volume flowing back to China has correspondingly decreased. Domestic NPI output recovery has been limited, so domestic NPI inventory has continued to fall. According to Mysteel data, in July it fell to a low of 29,400 physical tonnes, equivalent to 2,400 metal tonnes; in August, domestic inventory rose again to 48,900 physical tonnes, equivalent to approximately 3,500 metal tonnes.
Intermediates: Hydrometallurgical output recovers slowly while nickel matte output maintains high growth. Figure 2.10: Indonesian high-grade nickel matte & MHP output (10,000 tonnes). August Indonesian nickel hydrometallurgical intermediate nickel metal output was 35,700 tonnes, up 2.59% month-on-month and down 13.98% year-on-year. January-August cumulative output was 276,500 tonnes, down 2.85% year-on-year. August Indonesian nickel matte metal output was 21,100 tonnes, down 13.88% month-on-month and up 21.97% year-on-year. January-August cumulative output was 230,500 tonnes, up 100.61% year-on-year. As of now, the Blue Flame project at the Weda Bay Industrial Park and the ENC project at the Morowali Industrial Park have been commissioned and entered the debugging and ramp-up phase. The ramp-up cycle typically lasts six months to a year, with limited actual capacity contribution. Other projects originally planned for 2026 commissioning, including Chenxi, Vale, and Guangqing, have shown no commissioning activity. The total planned new capacity for the year exceeds 400,000 tonnes, but only 139,000 tonnes has been commissioned so far, with overall commissioning progress falling short of market expectations. Meanwhile, due to tight sulfur supply, output recovery from existing capacity is limited, so Indonesian MHP cumulative output maintains negative growth as of now. On the nickel matte side, because hydrometallurgical costs are high, the economics of pyrometallurgy have become more prominent, with some NPI capacity switching to nickel matte, keeping nickel matte output at high growth. Figure 2.11: High-grade nickel matte import data (10,000 tonnes). Figure 2.12: MHP import data (10,000 tonnes). According to China Customs data, August China nickel hydrometallurgical intermediate imports were 114,900 tonnes, up 15,600 tonnes month-on-month, a gain of 15.67%, and down 55,800 tonnes year-on-year, a decline of 32.68%. Of this, imports from Indonesia were 105,600 tonnes, up 24.28% month-on-month, accounting for 91.96% of the month's imports. January-August 2026 nickel hydrometallurgical intermediate cumulative imports were 1,067,900 tonnes, down 10.15% year-on-year. August China nickel matte imports were 33,000 tonnes, up 5,200 tonnes month-on-month, a gain of 10.74%, and up 16,100 tonnes year-on-year, a gain of 95.72%. Of this, imports from Indonesia were 28,200 tonnes, up 1.60% month-on-month, accounting for 85.40% of the month's imports. January-August 2026 nickel matte cumulative imports were 393,900 tonnes, up 45.85% year-on-year.
Nickel sulfate: Battery nickel consumption performs well, and nickel sulfate output continues to recover. SMM data shows August nickel sulfate output was approximately 37,780 nickel metal tonnes, up about 5.9% month-on-month and up about 23.95% year-on-year. January-August domestic nickel sulfate cumulative output was 281,000 nickel metal tonnes, up 32.79% year-on-year. Figure 2.13: Nickel sulfate output (metal tonnes). Figure 2.14: Changes in nickel sulfate feedstock proportions. According to China Customs statistics, August China nickel sulfate imports were 20,575 tonnes, up 983 tonnes month-on-month, a gain of 5.0%, and down 9,718 tonnes year-on-year, a decline of 32.1%. Of this, imports from Indonesia were 12,180 tonnes, from South Korea 3,265 tonnes, and from Finland 1,799 tonnes. January-August China nickel sulfate cumulative imports were 205,417 tonnes, up 28.2% year-on-year. August China nickel sulfate exports were 167 tonnes, down 357 tonnes month-on-month, a decline of 68.1%, and down 340 tonnes year-on-year, a decline of 67.1%. Of this, exports to South Korea were 40 tonnes and to Japan 110 tonnes. January-August China nickel sulfate cumulative exports were 3,199 tonnes, down 33.0% year-on-year. Figure 2.15: Nickel sulfate imports (tonnes). Figure 2.16: Nickel sulfate exports (tonnes).
Electrolytic nickel: Year-to-date cumulative output approaches negative growth. According to SMM data, August national refined nickel output reached 30,100 tonnes, down 4.14% month-on-month and down 14.49% year-on-year. January-August national cumulative output was 276,700 tonnes, up 4.80% year-on-year. Cumulative output growth was 17.5% in 2025, 35.9% in 2024, and 41.26% in 2023. It is evident that the year-on-year growth rate of domestic refined nickel output is gradually contracting. Figure 2.17: Domestic electrolytic nickel output. Figure 2.18: Refined nickel import and export data. According to China Customs data, August China refined nickel imports were 16,985.818 tonnes, down 3,956 tonnes month-on-month, a decline of 18.89%, and down 7,200 tonnes year-on-year, a decline of 29.77%. January-August China refined nickel cumulative imports were 187,380.093 tonnes, up 30,365 tonnes year-on-year, a gain of 19.34%. August China refined nickel exports were 2,640.13 tonnes, up 2,042 tonnes month-on-month, a gain of 341.24%, and down 12,408 tonnes year-on-year, a decline of 82.46%. January-August China refined nickel cumulative exports were 15,107.815 tonnes, down 104,217 tonnes year-on-year, a decline of 87.34%.
Nickel Market Fundamentals: Demand Analysis
Battery nickel usage: End demand gradually recovering, battery nickel consumption outlook optimistic. Figure 3.1: Ternary precursor output (tonnes). Figure 3.2: Ternary cathode material output (tonnes). Latest SMM data shows August China ternary cathode material output was 89,220 tonnes, up 2.48% month-on-month and up 29.98% year-on-year. January-August China ternary cathode material cumulative output was 673,300 tonnes, up 36.25% year-on-year. August China ternary precursor output was approximately 96,560 tonnes, up 0.76% month-on-month and up 23.10% year-on-year. January-August China ternary precursor cumulative output was 720,000 tonnes, up 30.89% year-on-year. Figure 3.3: Lithium battery output (GWh). Figure 3.4: Power battery installations (GWh). Data shows August China power and energy storage battery combined output was 237.0 GWh, up 8.8% month-on-month and up 69.8% year-on-year. January-August China power and energy storage battery cumulative output was 1,523.9 GWh, up 57.0% year-on-year. On installations: August domestic power battery installations were 79.0 GWh, up 5.9% month-on-month and up 26.3% year-on-year. Of this, ternary battery installations were 11.0 GWh, accounting for 14.0% of total installations, down 1.0% month-on-month and up 0.9% year-on-year; lithium iron phosphate battery installations were 67.6 GWh, accounting for 85.6% of total installations, up 7.0% month-on-month and up 31.0% year-on-year. January-August domestic power battery cumulative installations were 489.1 GWh, up 17.0% year-on-year. Of this, ternary battery cumulative installations were 85.6 GWh, accounting for 17.5% of total installations, up 10.6% year-on-year; lithium iron phosphate battery cumulative installations were 402.7 GWh, accounting for 82.3% of total installations, up 18.3% year-on-year. Figure 3.5: Automobile production and production-sales ratio (units). Figure 3.6: New energy vehicle output (10,000 units). According to China Association of Automobile Manufacturers statistics, August automobile production and sales were 2.684 million and 2.712 million units respectively, down 4.7% and 5.1% year-on-year. January-August automobile production and sales were 20.255 million and 20.315 million units respectively, both down 3.8% year-on-year. On new energy vehicles: August new energy vehicle production and sales were 1.653 million and 1.643 million units respectively, up 18.9% and 17.8% year-on-year; new energy vehicle sales reached 60.6% of total new automobile sales. January-August new energy vehicle production and sales were 10.668 million and 10.650 million units respectively, up 10.8% and 10.7% year-on-year, with new energy vehicle sales reaching 52.4% of total new automobile sales. Table 3.1: Growth rates across various segments of the new energy industry chain. From the new energy industry chain perspective, January-August domestic new energy vehicle production cumulative year-on-year growth recovered to above 10%; ternary power battery installations cumulative year-on-year growth was 10.6%; upstream ternary cathode material output cumulative year-on-year and new energy chain nickel sulfate demand cumulative year-on-year growth both maintained high growth above 35%.
Stainless steel: "Peak season" performance yet to be verified, industry operating weakly. Figure 3.7: Stainless steel output by series (10,000 tonnes). Figure 3.8: Indonesian stainless steel output (10,000 tonnes). According to Mysteel statistics, August domestic 43 stainless steel mills' estimated crude steel output was 3.7208 million tonnes, up 143,200 tonnes month-on-month, a gain of 4%, and up 12.22% year-on-year. Of this: 200-series 1.0693 million tonnes, up 17,900 tonnes month-on-month, a gain of 1.7%, and up 6.16% year-on-year; 300-series 1.9665 million tonnes, up 127,300 tonnes month-on-month, a gain of 6.92%, and up 131,000 tonnes year-on-year, a gain of 7.14%; 400-series 685,000 tonnes, down 2,000 tonnes month-on-month, a decline of 0.29%, and up 114,600 tonnes year-on-year, a gain of 20.09%. January-August domestic stainless steel cumulative output was 9.8759 million tonnes, up 3.85% year-on-year. Of this, 200-series was 2.9155 million tonnes, up 9.37% year-on-year; 300-series output was 5.0783 million tonnes, down 0.85% year-on-year; 400-series output was 1.8821 million tonnes, up 9.30% year-on-year. On the Indonesian side, August Indonesian stainless steel crude steel output was 352,000 tonnes, down 12.66% month-on-month and down 16.59% year-on-year. January-August Indonesian stainless steel cumulative output was 3.303 million tonnes, up 0.18% year-on-year. Figure 3.9: Stainless steel export situation (10,000 tonnes). Figure 3.10: Stainless steel import situation (10,000 tonnes). According to General Administration of Customs data, August domestic stainless steel imports were approximately 140,900 tonnes, up 24,500 tonnes month-on-month, a gain of 21.1%, and up 23,800 tonnes year-on-year, a gain of 20.3%. January-August 2026 cumulative imports were approximately 1.0143 million tonnes, down 3,200 tonnes year-on-year, a decline of 0.3%. August domestic stainless steel exports were approximately 445,700 tonnes, up 54,300 tonnes month-on-month, a gain of 13.9%, and down 2,200 tonnes year-on-year, a decline of 0.5%. January-August cumulative exports were approximately 2.8962 million tonnes, down 467,900 tonnes year-on-year, a decline of 13.9%. Figure 3.11: Stainless steel inventory: seasonal chart (10,000 tonnes). Figure 3.12: Stainless steel 300-series inventory: seasonal chart (10,000 tonnes). Figure 3.13: Stainless steel 200-series inventory (10,000 tonnes). Figure 3.14: Stainless steel 400-series inventory: seasonal chart (10,000 tonnes). Overall, January-August, 300-series was 14.7952 million tonnes, up 6.35% year-on-year; 200-series output was 8.0995 million tonnes, up 6.85% year-on-year; total nickel consumption was 1.4193 million tonnes, up 7.09% year-on-year, of which primary nickel consumption totaled 1.1589 million tonnes, up 10.51% year-on-year. Table 3.2: Domestic stainless steel nickel consumption.
Supply-Demand Balance and Inventories
Supply-demand analysis. Figure 4.1: Global refined nickel supply-demand balance. The World Bureau of Metal Statistics (WBMS) latest data shows July 2026 global refined nickel output was 314,900 tonnes, consumption was 275,200 tonnes, resulting in a supply surplus of 39,700 tonnes. Table 4.1: Domestic primary nickel supply-demand balance estimate. Domestic primary nickel supply-demand situation: On the output side, due to high feedstock costs, refined nickel output growth has slowed, especially after entering the third quarter when monthly output continued to decline month-on-month and year-to-date cumulative output has already turned negative year-on-year. We therefore lowered our annual refined nickel output estimate. On the import side, the smelting product import landscape has undergone significant changes. Earlier, due to ore tightness in Indonesia, NPI output declined notably, corresponding to a clear year-on-year drop in domestic NPI imports. We have revised down import expectations quarter by quarter, with third-quarter NPI imports already hitting monthly lows, further lowering the full-year NPI import estimate by 120,000 tonnes on the basis of the semi-annual report. For refined nickel, based on the first eight months of import volumes, we further raised the annual refined nickel import estimate by 100,000 tonnes. On the consumption side, new energy vehicle production and sales data for the first eight months have recovered to double-digit year-on-year growth, ternary cell installations grew over 10% year-on-year, and based on battery material nickel consumption in the first eight months, we further raised battery consumption estimates. After adjustments, domestic supply surplus remains around 130,000 tonnes, with supply-demand tensions not particularly pronounced.
Inventory analysis. In the third quarter, domestic and LME inventory trends diverged. LME inventories first declined then rose, falling from 274,620 tonnes in early July to 264,444 tonnes before rising again to the current 278,826 tonnes, a quarterly increase of around 4,200 tonnes. Inventory changes were mainly from nickel plates, which fell from 247,278 tonnes in early July to 237,486 tonnes before increasing to the current 252,018 tonnes; nickel briquettes continued to destock, falling from 24,924 tonnes at the start of the quarter to the current 24,222 tonnes. Domestic social inventories rose from 126,400 tonnes in early July to 133,700 tonnes before falling to the current 124,900 tonnes. Bonded zone inventories remained broadly stable at around 2,000 tonnes. Figure 4.2: LME nickel inventory (10,000 tonnes). Figure 4.3: LME inventory breakdown (tonnes). Figure 4.4: Domestic nickel social inventory (10,000 tonnes). Figure 4.5: Bonded zone nickel inventory (tonnes).
Cost and Profit Analysis
In the third quarter of this year, across the traditional industrial chain of nickel ore-NPI-stainless steel, on the ore side, due to loose Indonesian nickel ore supply, ore prices declined. Taking 1.6% grade as an example, the benchmark price fell from a high of $70.83 per wet tonne in mid-May to the current $63.2, while the premium dropped from $8.5 per wet tonne in early May to flat. As nickel ore supply eased and ore prices fell, domestic NPI prices followed lower, falling from around 1,130 yuan per nickel point in early July to around 1,040 yuan per nickel point currently. Domestic NPI plant profits, after a significant recovery, have contracted again, with some high-cost domestic regions falling back into losses. Stainless steel mills, as NPI prices declined, saw cost support continuously loosen. Combined with the post-September "peak season" underperformance versus market expectations, stainless steel prices fell, and domestic stainless steel smelting is currently in a loss-making state. On intermediates, due to high feedstock sulfur and nickel ore prices, hydrometallurgical HPAL smelting cost pressure is significant. After the September HPM reduction, theoretical feedstock costs have declined somewhat, but due to drought disruptions, spot ore prices will find it difficult to decline in tandem, and the actual MHP cost reduction is expected to be limited. Currently, hydrometallurgical and pyrometallurgical integrated nickel sulfate production margins are thin; electrowinning nickel production, whether using externally purchased feedstock or integrated operations, is currently in a loss-making state. Figure 5.1: Indonesian nickel ore domestic trade benchmark price. Figure 5.2: Indonesian intermediate costs. Figure 5.3: Externally sourced feedstock electrowinning nickel costs. Figure 5.4: Domestic NPI profits. Figure 5.5: Nickel sulfate profits. Figure 5.6: Stainless steel profits.
Summary and Outlook
Supply side: Indonesia's full-year nickel ore RKAB total quota remains at 260-270 million wet tonnes, with only small case-by-case supplementary additions for individual mines. The WBN mine restart did not bring about a nationwide quota relaxation. Philippine nickel ore shipments remain at high levels; January-August cumulative Philippine-to-Indonesia nickel ore shipments reached 11.8373 million tonnes, up 55.17% year-on-year. On the smelting side, smelting segments show clear divergence. Pyrometallurgical high-grade nickel matte output maintains high growth, but constrained by sulfur and ore source limitations, Indonesian MHP hydrometallurgical output recovery has fallen short of expectations: January-August Indonesian hydrometallurgical product cumulative output was 276,500 tonnes, down 2.85% year-on-year; January-August Indonesian nickel matte cumulative output was 230,500 tonnes, up 100.61% year-on-year. Domestic smelting: January-August national NPI cumulative output was 222,900 nickel metal tonnes, up 8.59% year-on-year; January-August refined nickel national cumulative output was 276,700 tonnes, up 4.80% year-on-year; January-August domestic nickel sulfate cumulative output was 281,000 nickel metal tonnes, up 32.79% year-on-year. Demand side: In the traditional stainless steel segment, January-August, 300-series was 14.7952 million tonnes, up 6.35% year-on-year; 200-series output was 8.0995 million tonnes, up 6.85% year-on-year; total nickel consumption was 1.4193 million tonnes, up 7.09% year-on-year, of which primary nickel consumption totaled 1.1589 million tonnes, up 10.51% year-on-year. In the new energy segment, January-August terminal new energy vehicle cumulative year-on-year growth recovered to above 10%; ternary power battery installations cumulative year-on-year growth was 10.6%; upstream ternary cathode material output cumulative year-on-year and new energy chain nickel sulfate demand cumulative year-on-year growth both maintained high growth above 35%. Overall, ternary material and precursor output in the new energy segment maintain year-on-year growth, battery nickel consumption shows resilience, but the ternary battery share continues to be squeezed by lithium iron phosphate, limiting incremental pull. On the traditional consumption side, the stainless steel "Golden September" peak season has underperformed, 300-series smelting has fallen into losses, mill raw material procurement is mainly need-based, and active restocking willingness is insufficient, continuously weighing on nickel feedstock. Inventory side: Total domestic and international inventories remain at high levels, and high visible inventories have become the core real-world constraint capping nickel price upside. Although the import profit window remained closed throughout the third quarter, long-term contracts, delivery-related flows, and group transfers supported import volumes at high levels. Cost and profit side: Across the traditional industrial chain, NPI and stainless steel have recorded varying degrees of losses; electrowinning nickel smelting is also in a loss-making state, and cost support across the supply chain is gradually strengthening. Looking ahead to the fourth quarter, the nickel market is expected to continue its range-bound oscillation pattern. The global refined nickel oversupply situation has not yet reversed: the upside is capped by high inventories and weak stainless steel end-user demand, while the downside is supported by Indonesian mining costs and smelting losses. Overall, absent large-scale substantive production cuts on the supply side, supply disruptions are more likely to generate pulse-like moves rather than drive a trend of one-directional gains. The expected dense trading range for nickel prices in the fourth quarter is 120,000 to 142,000 yuan per tonne. Risk points: the persistence of El Nino-driven drought in Indonesia, changes in Indonesian mining policy, the extent of self-rescue production cuts in stainless steel, and overseas macroeconomic interest rate volatility.
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