- China’s real estate slump dampens nickel market
- Indonesia’s nickel sector pressured by oversupply and quotas
Nickel prices on the London Metal Exchange (LME) remained firm, with the three-month contract closing at $15,100/tonne (t) from last week’s $15,161/t. LME nickel stocks remained range-bound at 209,748 t from 211,662 t a week earlier.
Stability was supported by a weaker US dollar, but sentiment was dampened by China’s real estate slump, pressure on its EV sector, and rising pure nickel inventories.
China nickel market: stable prices and rising production amid oversupply
China’s nickel market in July saw stable short-term nickel ore prices and a slight rebound in nickel pig iron (NPI) prices amid persistent oversupply. Imports of nickel ore from the Philippines decreased by 3.39% m-o-m to 4.68 million tonnes (mnt), while NPI imports dropped 19.7% compared to June. Despite these shifts, nickel ore prices in major Chinese cities remained steady, reflecting cautious market sentiment and subdued trading as downstream buyers purchased mainly to meet immediate demand.
Indonesian nickel market faces oversupply
Indonesia’s nickel sector faces ongoing pressure due to government-set production quotas that exceed actual demand, worsening the global supply surplus. Prices for nickel ore used in pyrometallurgy have declined, while those for hydrometallurgy have remained steady. High-grade nickel pig iron prices are stable, but smelters continue to experience tight profit margins. Although policymakers are considering interventions, the combination of ample supply and weak demand is expected to limit any near-term price recovery.
Nickel glut weighs on stainless steel despite US tariff support
Despite US tariffs supporting stainless steel mills by maintaining base prices, overall demand remains weak both domestically and globally. Stainless markets face challenges from persistent low demand, with mills like Outokumpu and Acerinox showing mixed financial results due to soft markets and imports. Nickel prices remain on a downtrend, restrained by a global supply glut, particularly from Indonesia, which continues strong production while domestic nickel demand peaks. Although tariffs have slowed imports, the nickel surplus caps stainless steel price recoveries, leaving the market cautious about near-term prospects.
Outlook
Nickel prices are likely to remain subdued due to persistent global oversupply and elevated inventories. Significant and sustained production adjustments across the market are necessary for a meaningful price recovery. The prevailing long-term trend indicates continued price softness, keeping stainless steel surcharges and overall market sentiment cautious.
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