- China ends subsidy granted on nickel imports
- US Fed cuts rates first time in 2025, by 25 basis pts
Nickel futures on the London Metal Exchange (LME) exhibited mild volatility amid rising warehouse stocks. The 3-month nickel futures traded between $15,255-15,465/t early in the week before settling at $15,325/t on 19 September, a slight dip from the previous week’s close at $15,345/t.
LME warehouse inventories increased from 224,484 tonnes (t) on 15 September to a peak of 228,468 t on 17 September, marking the highest stock level since early September. Following the peak, stocks eased marginally to 228,444 t by 19 September.
On the macro front, the US Fed announced its first 2025 rate cut of 25 basis points, lowering the federal funds rate to 4-4.25%. While the move was widely anticipated, it failed to spur optimism across base metals, with broader sentiment weighed down by oversupply concerns and a continued build-up in Asian warehouse stocks.
Macro factors
China ends Russian nickel import subsidy
China has suspended an unofficial subsidy previously granted to state-owned enterprises importing nickel from Russia. This rebate, which varied with market conditions, helped make Russian nickel more price-competitive in China. Despite removing the subsidy before President Putin’s early September visit, China remains Russia’s key nickel buyer amid Western sanctions. The move aligns with rising Indonesian nickel output backed by Chinese investors, reducing China’s reliance on subsidised Russian nickel imports. The policy shift is strategic, balancing political ties and market realities.
FPX nickel secures $3.5-m funding for Baptiste project
FPX Nickel Corp received a $3.5 million non-repayable grant from Natural Resources Canada’s Critical Minerals Infrastructure Fund to support feasibility and environmental studies for essential access road and electrical transmission line development at its Baptiste Nickel Project. The funding covers 50% of the estimated costs and involves collaboration with First Nations. This investment aims to advance infrastructure planning critical to unlocking Baptiste’s low-carbon, sulphur-free nickel production potential in British Columbia.
Asia-Pacific nickel ore market overview and forecast
In 2024, Asia-Pacific’s nickel ore consumption dropped nearly 10% to 114 mnt, with the market value declining 16.3% to $36.7 billion. Indonesia and the Philippines led production, which grew a slight 2.1% to 121 mnt. Imports fell sharply, with China dominating 91% of imports. Exports grew 11%, largely from the Philippines. The market is forecast to experience modest growth, expanding at a CAGR of 1.3% in volume and 0.8% in value through 2035, to touch 132 mnt and $40.2 billion respectively.
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