Nickel Prices Decline Amid Weak Demand and Supply Pressures
Nickel prices exhibited a downward trend last week, with spot prices fluctuating between 123,200-127,300 yuan/mt and SHFE nickel futures ranging from 123,300 yuan/mt to 126,300 yuan/mt. Premiums for Jinchuan No.1 nickel were quoted between 1,700-2,100 yuan/mt, with an average premium of 1,850 yuan/mt, declining week-on-week. Market trading remained sluggish, while downstream end-use demand remained weak, adding pressure on nickel prices.
On the macroeconomic front, Federal Reserve Chairman Jerome Powell’s cautious stance on interest rate cuts weighed on base metals, while the upcoming Two Sessions in China led investors to take a wait-and-see approach. Indonesia approved 207 RKABs for 2025, with a total quota of 298 million wmt. While nickel ore shipments continued, some miners were reluctant to sell due to the rainy season. The domestic trade average price of 1.2% grade laterite nickel ore rose to $23.5/wmt, while CIF prices for 1.4% grade nickel ore from the Philippines remained stable at $45.75/mt. Despite tight nickel ore supply, the refined nickel market continued to experience surplus pressure.
China’s refined nickel production in February was expected to reach 29,000 mt, down 0.4% month-on-month, while domestic and overseas inventory levels remained high. As of February 14, refined nickel social inventory in six major regions in China reached 49,459 mt, reflecting a 10.67% increase month-on-month. The supply-demand gap persisted, and downstream smelters may engage in stockpiling once raw material inventories are depleted. SHFE nickel prices are expected to fluctuate within the range of 123,150-130,000 yuan/mt in the short term.
Nickel Sulphate Market Outlook
The SMM battery-grade nickel sulphate index price stood at 26,588 yuan/mt last week, with a quotation range of 26,400-27,060 yuan/mt, showing a slight decline week-on-week. Nickel salt prices remained stable throughout the week, with only a minor drop on February 18. However, market conditions weakened further, with both supply and demand facing challenges.
On the demand side, ternary cathode precursor manufacturers experienced reduced orders due to weaker end-use demand, leading to lower demand for nickel salts. Many precursor manufacturers had stocked sufficient inventory before the holiday, resulting in fewer new inquiries. As a result, market transaction activity remained weak.
On the supply side, some nickel salt smelters had not resumed production due to financial losses, and most producers maintained stable quotations compared to the previous week. Spot order transactions remained sluggish. LME nickel prices fluctuated, providing limited cost support for nickel salts. With ternary cathode precursor plants showing no improvement in March production schedules, demand for nickel salts is expected to remain subdued.
The supply-demand balance for nickel salts is projected to stay tight in March. As the traditional nickel salt procurement period approaches, market transaction prices are expected to remain stable.
