1. Report Industry Investment Rating - Not provided in the document 2. Core Views of the Report - In Q1 2026, the global nickel and stainless - steel markets showed a co - existence of an upward - shifted valuation center and wide - range fluctuations. The core contradiction in the industry chain was the all - around tightening of Indonesian nickel ore policies, leading to a supply structural reversal and damaged production stability [1]. - In Q2 2026, the biggest potential variable in the market is the actual approval progress of Indonesian nickel ore quotas and marginal policy adjustments. The nickel policy in Indonesia still has certain bullish support for the bottom center in Q2. The cost bottom is significantly lifted due to the proposed export tariff and windfall tax on nickel. In Q2, Indonesia and the Philippines will gradually emerge from the rainy season, and the downstream production will increase. The shortage of sulfur in the hydrometallurgical process may have an impact as early as Q2. Macro - level factors such as the development of the US - Iran war and the release of US core data need to be continuously monitored [2]. - In Q2 2026, it is relatively difficult for stainless steel to have a significant independent market. The key lies in the de - stocking during the traditional consumption peak season and the transmission of macro - policies. If the terminal procurement orders are effectively released and drive the high - level social inventory into a continuous de - stocking channel, the spot price may rise moderately under cost support. Overall, the stainless - steel market in Q2 will be range - bound between 13,000 and 14,500 yuan/ton, following the guidance of Shanghai nickel and macro - level factors [2][4]. - It is expected that the core fluctuation range of the main Shanghai nickel contract in Q2 will be between 130,000 and 150,000 yuan/ton [4]. 3. Summary by Relevant Catalogs 3.1 Q1 Market Review - In Q1, the market price was strongly pushed up by a series of strong logics. From late November last year to late January, the market pricing was unilaterally dominated by the "strong expectation" of a significant contraction in Indonesian supply. The expected RKAB quota in 2026 was 250 - 260 million tons, about 30% lower than that in 2025. With the Shanghai nickel price hitting a low of 110,000 yuan, the market price soared. LME nickel broke through the resistance level of $18,785/ton, and the main Shanghai nickel contract reached a high of 152,000 yuan/ton [10]. - From February to the end of the quarter, the sharp rise driven by sentiment and supply - side contraction expectations encountered strong resistance from the real fundamentals. During the traditional off - season around the Chinese Spring Festival, the mid - and downstream had low acceptance of raw materials, and the refined nickel inventory increased due to sufficient profits. The large amount of visible inventory and the damaged downstream transmission mechanism led to a stalemate in the spot market. After the festival, as the news of expanding production by allowing some compliant mining enterprises to increase quotas came out, the bullish sentiment cooled down, and the market fluctuated around 136,000 yuan with strong policy support at the bottom [10][11]. 3.2 Industrial Chain Performance 3.2.1 Nickel Ore - In Q1, the premium of the nickel ore end was the core driver for the cost increase of the entire nickel industry chain. The expectation of quota reduction had a profound impact, and the panic about quota issuance exceeded the actual impact on production. The price of Indonesian nickel ore continued to rise, and some Indonesian projects imported from the Philippines, pushing up the raw material cost. The market was in a situation of weak supply and demand due to the rainy season in the Philippines and the pre - holiday stocking in the Chinese market. The strategic intention of Indonesia's quota reduction was to control the quantity and raise the price to strengthen its global pricing power [15][16]. - In Q2, the nickel ore production and port shipments in the Philippines are expected to increase seasonally. The nickel ore inventory at Chinese ports is likely to stabilize and rebound. However, the mining cost in Indonesia and the Philippines has increased, and the scarcity of high - grade nickel ore has intensified. The approval of RKAB in Indonesia is expected to speed up, and the panic in the ore market may be alleviated. The nickel ore price will remain high, forming a solid cost base for the industry chain [17]. 3.2.2 Ferronickel - In Q1, the ferronickel market had a significant cost - driven upward trend. The strong expectation of reduced ore supply was quickly transmitted to the ferronickel end, pushing up the price. Affected by the tightened supply of nickel ore from Indonesia and the Philippines, the cash cost of ferronickel smelting enterprises increased sharply, and the production in China and Indonesia declined. The import volume of Indonesian ferronickel decreased, and traders continued to raise prices. At the same time, the substitution economy of scrap stainless steel increased [22]. - In Q2, the ferronickel market will enter a complex stage of two - way supply - demand game. The supply is expected to increase marginally as the nickel ore shipments from the Philippines recover seasonally and the quota approval in Indonesia speeds up. However, the demand is uncertain as the downstream stainless - steel market has difficulty supporting high raw material prices, and the cost advantage of scrap stainless steel over ferronickel is prominent. The ferronickel price is strongly supported by high - cost raw materials, but it is difficult to break through further [23]. 3.2.3 Nickel Sulfate and Intermediates - In Q1, the nickel sulfate and related intermediate product market was frequently disturbed, but the industry maintained a production - based - on - sales operation mode. The supply was restricted by the tightened nickel ore quota in Indonesia and a safety accident in the wet - smelting park. The market supply of intermediate products was extremely tight, and the discount coefficient of MHP to LME nickel remained high. On the demand side, some domestic battery and ternary precursor enterprises rushed to export, driving up the price of battery - grade nickel sulfate [32]. - In Q2, the supply of nickel sulfate and intermediates faces uncertainties due to the potential impact of the Middle - East geopolitical situation on sulfur imports. The demand may decline as the impulse demand from pre - export rush fades. The price transmission from the upstream cost increase to the terminal may be limited. The long - term impact of the trade agreement between Indonesia and the US on Chinese enterprises in Indonesia needs to be continuously monitored [32][34][35]. 3.2.4 Stainless Steel - In Q1, the stainless - steel market had limited independent trends, and the price followed the fluctuations of Shanghai nickel and Indonesian policy disturbances. The price increase driven by cost was not effectively supported by terminal demand. Due to the Spring Festival and the traditional off - season, the price transmission to the terminal was difficult, and the inventory accumulated. Only after the mid - March resumption of work in the mid - and downstream did the inventory start to decline [40]. - In Q2, the key is the de - stocking rate during the "Golden March and Silver April" consumption peak season and the acceptance of the current price by the downstream. If the terminal demand is effectively stimulated, the spot price may rise. However, the stainless - steel export still faces trade barriers. The price bottom is firm, but whether it can stabilize above 14,200 yuan depends on the demand [40]. 3.3 Q2 Balance Explanation - On the supply side, the core logic in Q2 is the bottleneck in the RKAB quota issuance in Indonesia and the multiple uncertainties in raw material supply. The new digital quota approval system in Indonesia has led to a long approval time, and the actual approved nickel ore volume is far lower than expected. The impact of the US - Iran conflict on sulfur imports may cause production cuts or shutdowns in the Indonesian wet - smelting industry as early as April [52][53]. - On the demand side, Q2 is the traditional peak consumption season for the stainless - steel industry. The recovery of terminal demand is the core. The demand in the real - estate sector is still weak, but the home - appliance sector is recovering as expected. Steel mills may rush to replenish inventory if the price is appropriate. In the new - energy field, the sales of new - energy vehicles usually pick up after the Tomb - Sweeping Festival, and the price of nickel sulfate is supported by seasonal demand and strong cost [54].

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - The high - price and inventory - accumulation situation in the nickel market is due to the divergence between the secondary market and the industrial sector in the expectation of Indonesian policies. The game over Indonesian policies continues, and short - term fluctuations are affected by the departure of speculative funds before the Spring Festival [1]. - For the Shanghai nickel market, the mid - term contradiction lies in Indonesian nickel ore policies. Although the current fundamentals are not strong, the price is mainly driven by policy expectations. Attention should be paid to the risk of capital withdrawal before the Spring Festival and the possible second - wave increase after the festival if the quota approval is less than expected [4][5]. - For stainless steel, there are frequent maintenance and production cuts in February, and the cost support center has moved up. The overall trend follows Shanghai nickel and other non - ferrous metals. The market is affected by Indonesian policies, and it shows a situation of weak supply and demand in the off - season, with seasonal inventory accumulation expected. The direction depends on the dynamics of Indonesian quota policies [6]. 3. Summary by Related Catalogs 3.1 Fundamental Key Events - **Quota Event**: Indonesia is still approving nickel ore quotas, with the target possibly reduced to 2.5 - 2.6 billion tons. Some enterprises have obtained quotas, but the quantity is currently lower than in previous years. There is a difference in views between the industry and capital on the policy. If the quota is implemented, it may reverse the oversupply expectation and impact the high inventory [1]. - **Associated Mineral Event**: Indonesia plans to include associated minerals such as cobalt in nickel ore in the pricing and taxation system. This may increase the ore - purchasing cost of the smelting end by about 5% - 10%. However, if the cost can be transferred to downstream cobalt products, the impact on the nickel - wet - process cost will be limited [2]. - **Conflict Event**: Some Indonesian mining companies are facing potential fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land. The negotiation process of fines is worthy of attention as it may lead to an increase in ore prices and smelting costs. In addition, the monopoly behavior of the port storage and logistics in the IMIP park has increased market concerns about the supply of Indonesian resources [2]. - **Other Events**: In early 2026, Vale suspended its nickel mining business, but later resumed normal operations after obtaining part of the mining quota. It is speculated that Indonesia may favor leading enterprises and wet - process projects [3]. 3.2 Market Quotes Views - **Shanghai Nickel**: Before the Spring Festival, the departure of funds has an impact. The mid - term contradiction lies in Indonesian policies. The macro - sentiment of non - ferrous metals has cooled down. The current fundamentals are weak, with high inventory and marginal inventory accumulation, and the industry tends to sell on rallies for hedging. The market mainly trades on the expectation of Indonesian nickel ore policies. The price of 1.6% grade nickel ore has increased, which may drive up the pyrometallurgical cost. Attention should be paid to the important window period of Indonesian nickel ore quota policies from the Spring Festival to March [4][5]. - **Stainless Steel**: There are frequent maintenance and production cuts in February, and the cost support center has moved up. The overall trend follows Shanghai nickel and other non - ferrous metals. Indonesian policies such as quota, associated - product pricing, and mining fines have increased market uncertainty. If the quota policy is implemented, it may support ferronickel. The cobalt pricing may increase the ferronickel cost by about 5% and the stainless - steel cost by 3%. The supply of stainless steel in February has decreased significantly, and the consumption end is also weak. The market shows a situation of weak supply and demand in the off - season, with seasonal inventory accumulation expected, and the direction depends on the dynamics of Indonesian quota policies [6]. 3.3 Inventory Tracking - **Refined Nickel**: On February 6, China's social inventory increased by 1,191 tons to 70,429 tons, with warehouse - receipt inventory increasing by 4,398 tons to 51,274 tons, spot inventory decreasing by 3,207 tons to 15,285 tons, and bonded - area inventory remaining unchanged at 3,870 tons. LME nickel inventory decreased by 1,002 tons to 285,282 tons [7]. - **New Energy**: On February 6, the inventory days of the upstream, downstream, and integrated production lines of SMM nickel sulfate were flat month - on - month at 5, 9, and 7 days respectively. The precursor inventory increased by 0.2 to 13.3 days month - on - month, and the ternary - material inventory increased by 0.3 to 7.2 days month - on - month [7]. - **Nickel - Iron - Stainless Steel**: On February 5, the inventory of the entire nickel - iron industry chain decreased by 11% month - on - month to 119,000 metal tons. In January, the stainless - steel factory inventory was 1.5 million tons, with a year - on - year and month - on - month increase of 4% and 1% respectively. On February 5, the stainless - steel social inventory was 964,960 tons, with a week - on - week increase of 1.29%. Among them, the cold - rolled stainless - steel inventory was 607,856 tons, with a week - on - week increase of 3.83%, and the hot - rolled stainless - steel inventory was 357,104 tons, with a week - on - week decrease of 2.75% [7]. 3.4 Market News - The Indonesian government has suspended the issuance of new smelting licenses for certain products through the OSS platform [8]. - China's Ministry of Commerce and General Administration of Customs have decided to implement export license management for some steel products starting from January 1, 2026 [8]. - Indonesia plans to revise the benchmark - price formula for nickel ore commodities in early 2026 and will treat cobalt, a by - product of nickel, as an independent commodity and levy royalties [8]. - Indonesia plans to significantly reduce the 2026 nickel - ore production target from 379 million tons to 250 million tons [10]. - Some Indonesian mining companies are facing potential fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land, and they are negotiating with the government [10]. - The Indonesian energy and mineral resources minister said that the 2026 nickel - ore production quota will be adjusted according to industry demand, with the output possibly around 250 - 260 million tons [10]. - The KPPU reported that the port storage and logistics in the IMIP park had monopoly behavior, and the park is in negotiation [10]. - A Singapore - flagged bulk carrier carrying about 50,000 tons of nickel ore sank on its way to Yangjiang, China [11]. - Indonesia has started to approve the 2026 mining work plans and budgets for some companies [11]. - The Solway Investment Group plans to restart its nickel - mining business in Guatemala in a few months [11]. - The Indonesian investment department reported that the Indonesian subsidiary of Tsingshan Holding Group had never submitted an investment - activity report [12]. 3.5 Weekly Key Data Tracking of Nickel and Stainless Steel The report provides data on the closing prices, trading volumes, and related price differences of Shanghai nickel and stainless - steel futures, as well as the prices and spreads of various nickel - related products, stainless - steel products, and other related products [15].

1. Report Industry Investment Rating - No relevant content provided. 2. Core Views of the Report - The core game of nickel and stainless steel lies in Indonesia's nickel policies, with events such as quota adjustments, inclusion of associated minerals in pricing, fines for illegal land use, and suspension of mining operations affecting the market [1]. - For Shanghai nickel, there is a contradiction between high - inventory and marginal inventory accumulation, and an increase in supply elasticity after profit repair. The market has different expectations for Indonesia's nickel ore policies, and the price is expected to fluctuate widely due to the confrontation between hedging and speculative funds. It is recommended to consider options and pay attention to structural opportunities [3][4]. - For stainless steel, it is in a situation of weak supply and demand with off - season inventory accumulation. Cost logic supports the bottom of the price range, but the consumption side lacks upward drive. The price may fluctuate in the short term, and the breakthrough in direction depends on the dynamics of Indonesia's quota policies [5]. 3. Summary by Related Catalogs Indonesia's Nickel Policy Events - **Quota Event**: Indonesia's Energy and Mineral Resources Ministry may adjust the nickel ore quota to 2.5 - 2.6 billion tons. If the target quota is implemented, it may turn the oversupply expectation into a shortage and impact high inventories. There is a divergence in expectations between the secondary market and the industry [1]. - **Associated Minerals Event**: Indonesia wants to include associated minerals like cobalt in the pricing and taxation system, which may increase the ore - purchasing cost of the smelting end by about 5% - 10%. However, if the cost can be passed on, the impact on nickel cost will be limited [1]. - **Conflict Event**: Multiple companies in Indonesia are facing potential fines of about 80.2 trillion Indonesian rupiah for illegal land occupation. The fine negotiation process and monopoly issues in the IMIP port may increase market concerns about resource supply [2]. - **Other Events**: Vale suspended its nickel - mining business at the beginning of 2026 but later resumed normal operations. It is speculated that Indonesia may favor leading enterprises and wet - process projects [2]. Market Quotes - **Shanghai Nickel**: Overseas news is emerging one after another, and there is a game between hedging and speculative positions. The price is affected by factors such as high inventory, profit - driven supply increase, and differences in policy expectations. It is recommended to use options for trading and pay attention to structural opportunities [3][4]. - **Stainless Steel**: It faces pressure from off - season inventory accumulation and weak supply - demand fundamentals. Cost logic supports the price, but the consumption side is weak. The price may fluctuate in the short term, waiting for policy - driven breakthroughs [5]. Inventory Tracking - **Refined Nickel**: On January 30, China's social inventory increased by 6,622 tons to 69,238 tons, with an increase rate of 10.58%. LME nickel inventory increased by 2,556 tons to 286,284 tons [6]. - **New Energy**: On January 30, the inventory days of SMM's upstream, downstream, and integrated production lines of nickel sulfate were 5, 9, and 7 days respectively, with a month - on - month change of +0, +2, and +0 days. The precursor inventory increased by 0.1 days to 13.1 days, and the ternary material inventory increased by 0.1 days to 7.0 days [6]. - **Nickel - Iron and Stainless Steel**: On January 29, the SMM's full - industry chain inventory of nickel - iron decreased by 10% month - on - month to 121,000 metal tons. In December, the SMM's stainless - steel factory inventory was 1.48 million tons, with a year - on - month/ month - on - month change of +1%/ - 7%. On January 29, the social inventory of stainless steel was 952,674 tons, with a week - on - week increase of 3.37% [6]. Market News - Indonesia has suspended issuing new smelting licenses for certain products through the OSS platform [7]. - China's Ministry of Commerce and General Administration of Customs have implemented export license management for some steel products since January 1, 2026 [7]. - Indonesia's Energy and Mineral Resources Ministry will revise the benchmark price formula for nickel ore products in early 2026, including treating cobalt as an independent commodity for royalty collection [7]. - Indonesia plans to significantly reduce the 2026 nickel ore production target from 379 million tons to 250 million tons [8]. - Multiple companies in Indonesia are facing potential fines for illegal land occupation, and the final fine amount may be lower than the initial estimate [8]. - Indonesia's Energy and Mineral Resources Minister said that the 2026 nickel production quota will be adjusted according to industry demand, and the production may be around 250 - 260 million tons [8]. - The IMIP park in Indonesia is facing a monopoly investigation in port storage and logistics, but ship transportation is currently normal [8]. - A Singapore - flagged bulk carrier carrying about 50,000 tons of nickel ore sank on its way to Yangjiang, China [9]. - Indonesia's Energy and Mineral Resources Ministry has started approving the 2026 mining work plans and budgets [9]. - Solvay Investment Group plans to restart its nickel - mining business in Guatemala in a few months [9]. Weekly Key Data Tracking - The report provides data on the closing prices, trading volumes, and other indicators of Shanghai nickel, stainless steel, and related products, as well as price differentials and profit margins [11]. Graphs - The report includes a series of graphs showing the price trends, trading volumes, inventory changes, and cost - profit situations of nickel, stainless steel, and related products over different time periods [12][14][15][17][18][20][22][24].

Group 1 - The domestic futures market for black metals shows a predominantly bearish trend, with stainless steel futures experiencing fluctuations, opening at 14,410.00 CNY/ton and reaching a high of 14,895.00 CNY, reflecting an increase of approximately 2.16% [1] Group 2 - The stainless steel market is currently exhibiting a volatile upward trend, with strong performance observed in the trading session. However, institutions express concerns about future price movements due to various factors [2] - Guangzhou Futures indicates that the Indonesian nickel ore policy is expected to significantly raise nickel-iron costs, while demand for stainless steel remains weak. The price is anticipated to fluctuate within a range of 13,600 to 14,600 CNY/ton, with caution advised regarding potential pullbacks due to waning bullish sentiment or policy outcomes falling short of expectations [2] - Guotai Futures notes that the rebound in raw material prices and increased production from steel mills are leading to a gradual reduction in inventory, suggesting that stainless steel will continue to experience high-level fluctuations in the short term [2] - Qisheng Futures highlights that the cost side is notably supported by rising nickel-iron and ore prices, particularly with expectations of significant increases in Indonesian domestic ore prices. While there may be a slight recovery in production in January, overall growth is expected to be limited due to seasonal demand weakness [2] - Current social inventory levels have not shown significant accumulation, but there is still pressure for increases in the off-season, while low warehouse receipts provide some market support. The overall judgment is that stainless steel prices will primarily operate in a range-bound manner, with a focus on monitoring Indonesian policy developments and changes in demand [2]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The nickel price is expected to fluctuate widely in the short - term policy vacuum period due to the confrontation between industrial and secondary market funds. The key to breaking the deadlock lies in the implementation of Indonesian policies in the first quarter, especially the quota policy. For trading, it is recommended to consider options, and pay attention to structural opportunities. [4][5] - For stainless steel, the expectation of increased supply and weak demand in the off - season exerts pressure, while the cost center moves up due to the increase in ferronickel cost. Attention should be paid to the variables in Indonesian nickel ore policies. [6] 3. Summary by Related Catalogs 3.1 News Affecting the Nickel Market - **Quota Event**: On January 8, the Indonesian Ministry of Energy and Mineral Resources stated that the quota would be adjusted according to industry demand. On January 14, it was mentioned that the target might be cut to 260 million tons of nickel ore quota. The policy for 2026 is still under review, and it is expected that specific policies will be clarified in the first quarter. If the 260 - million - ton quota is implemented, it may lead to a shortage in the ore end and impact high inventories. [1] - **伴生 Mineral Event**: Indonesia wants to include associated minerals such as cobalt in the pricing and taxation system. If cobalt is priced, the direct cost of pyrometallurgy and hydrometallurgy may increase by about 5% - 10%. [2] - **违规 Fine Event**: Multiple companies in Indonesia are facing potential fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land. The final fine may be lower than the initial estimate. If the fine is implemented, it may indirectly lead to higher ore prices. [2] - **Other Events**: In early 2026, Vale suspended its nickel mining business but later resumed normal operations after obtaining the 2026 mining quota approval. It is speculated that Indonesia may favor hydrometallurgical projects. [3] 3.2 Market Outlook 3.2.1 Nickel - Industrial players focus on the weak fundamentals of nickel, with over - supply pressure and expectations of low - cost hydrometallurgical production. They mainly adopt a strategy of selling at high prices for hedging. Secondary market funds expect policy changes in Indonesia and tend to go long at low prices in the long - term. In the short - term, nickel prices are expected to fluctuate widely, and the key lies in the implementation of Indonesian policies in the first quarter. [4][5] 3.2.2 Stainless Steel - The expectation of increased supply and weak demand in the off - season puts pressure on stainless steel. However, the increase in ferronickel cost due to various factors in Indonesia may push up the cost of stainless steel. The cost logic may cause the stainless steel price to oscillate with a higher center, but the marginal increase in supply and weak demand still have a drag effect. [6] 3.3 Inventory Tracking - **Refined Nickel**: On January 15, China's refined nickel social inventory decreased by 102 tons to 60,587 tons. LME nickel inventory increased by 942 tons to 285,732 tons. [7] - **新能源**: On January 16, the inventory days of upstream, downstream, and integrated production lines of SMM nickel sulfate increased slightly month - on - month. The precursor inventory and ternary material inventory also increased month - on - month. [7] - **Nickel - Iron - Stainless Steel**: On January 15, the full - industry chain inventory of SMM nickel - iron decreased by 2% month - on - month to 131,000 metal tons. Stainless steel factory inventory decreased in December, and the social inventory of stainless steel decreased week - on - week on January 15. [7] 3.4 Market News - Indonesia has suspended issuing new smelting licenses through the OSS platform for projects producing certain nickel - related products. [8] - China's Ministry of Commerce and General Administration of Customs have implemented export license management for some steel products since January 1, 2026. [8] - The Indonesian Nickel Miners Association revealed that the Ministry of Energy and Mineral Resources would revise the benchmark price formula for nickel ore commodities in early 2026, including treating cobalt as an independent commodity for royalty collection. [8] - The Indonesian government plans to significantly reduce the 2026 nickel ore production target from 379 million tons to 250 million tons. [10]

Core Viewpoint - The nickel market in 2025 experienced a "wide fluctuation" characterized by an "N-shaped" price trend, driven by the interplay between "Indonesian policy expectations" and "global high inventory realities" [4][10]. Price Trend Summary - In the first quarter, optimistic market sentiment was fueled by Indonesia's tightening policy signals and China's "expanding domestic demand" strategy, pushing prices from 128,000 CNY/ton to a peak of 135,000 CNY/ton by mid-March [5]. - The second quarter saw a decline in prices due to high inventory and weak demand, with prices dropping from around 130,000 CNY/ton to approximately 122,000 CNY/ton by the end of June [5]. - The third quarter was marked by a narrow price range of 120,000 to 124,000 CNY/ton, with market sentiment remaining pessimistic due to high inventory and weak demand [5]. - In the fourth quarter, prices surged to 138,000 CNY/ton, driven by expectations of a significant reduction in Indonesia's nickel mining quotas and global liquidity easing [5][10]. Supply Side Overview - The global nickel supply market in 2025 exhibited an overall surplus, with significant production growth driven primarily by Indonesia's capacity expansion [8]. - The supply dynamics evolved through three phases: initial expectations of loosened supply due to increased mining quotas, mid-year cost pressures from resource tax hikes, and a late-year shift in expectations towards potential quota reductions [8]. - Indonesia's quota management significantly influenced global supply, with a dual model of domestic production and imports from the Philippines [8]. Demand Side Overview - The global nickel consumption market in 2025 showed moderate growth, with demand expected to reach 3.53 to 3.6 million tons, reflecting a year-on-year increase of about 5% [9]. - Demand dynamics shifted, with traditional stainless steel applications experiencing weak growth, while high-end alloys and special steels became the main drivers of demand growth [9]. - High-purity nickel plate demand remained resilient, particularly in high-nickel battery applications, despite challenges from competing technologies [9]. Market Dynamics Summary - The nickel market's volatility in 2025 highlighted the critical role of policy expectations and financial attributes, with prices reflecting not only current supply-demand conditions but also future narratives [7][10]. - The end-of-year price surge was primarily driven by fears of supply contraction, supported by macro liquidity conditions [6][10].

Core Viewpoint - Nickel prices have strengthened due to a combination of macroeconomic factors, industry trends, and geopolitical disturbances, reflecting a complex interplay of liquidity expectations, supply constraints, and geopolitical uncertainties [2] Supply Side - Indonesia's policy changes are the biggest variable affecting the supply landscape, with rumors suggesting a potential 34% reduction in nickel ore production quotas by 2026, which could significantly alter the global nickel supply-demand balance [2] - Indonesia's proposed revision of mining taxes to classify by-product cobalt as a separate taxable item may increase nickel smelting production costs, providing price support from the cost side [2] - Although LME nickel inventories are high, the availability of specific brands and grades for delivery is relatively tight, leading to higher spot premiums and indicating that immediate supply is not as loose as the absolute inventory figures suggest [2] Demand Side - Nickel demand is driven by two core areas: stainless steel, which accounts for over 60% of global nickel consumption, and the rapidly growing demand from the new energy battery sector, particularly high-nickel ternary batteries [3] - The aerospace and military sectors also contribute to demand through the use of nickel-based superalloys, adding a high-value growth segment to the market [3] - The nickel industry chain is characterized by high upstream concentration, technology-driven midstream, and diversified downstream demand, with Indonesia controlling about 70% of global supply [3] Market Outlook - Short-term nickel price trends will be primarily influenced by expectations surrounding Indonesia's production reduction policies, alongside geopolitical factors and resilient demand, suggesting prices may remain strong but volatile [4] - High global visible inventories will impose substantial constraints on the upward price potential, with future market focus on the implementation and effectiveness of Indonesia's policies and the path for inventory digestion [4]

Core Viewpoint - The nickel market is experiencing a downturn, with prices hitting new lows due to a combination of oversupply and policy changes from Indonesia, the largest nickel supplier [1][3][4]. Group 1: Market Dynamics - Copper and aluminum prices are reaching new highs, while nickel prices are declining, indicating a divergence in the non-ferrous metals market [1]. - Nickel production in China is projected to reach approximately 360,000 tons from January to November 2025, marking a significant year-on-year increase of 19.34% [2]. - Global nickel inventories have surpassed 310,000 tons by early December 2025, with an increase of over 100,000 tons throughout the year, indicating a high inventory level [2]. Group 2: Cost and Pricing Pressure - Nickel prices have fallen below the cost of purchasing raw materials and some integrated processes, leading to a lack of strong cost support for current price levels [2]. - The lowest production costs in the industry continue to decline, anchoring market prices to these lower levels amid oversupply [2]. Group 3: Policy Variables - Indonesia's potential policy changes could significantly impact future nickel supply, with mining quotas expected to decrease from 379 million tons in 2025 to approximately 250 million tons in 2026 [3]. - Proposed adjustments to pricing and tax regulations in Indonesia may increase mining costs, as cobalt and other by-products will be treated as independent commodities subject to royalties [3]. - The market is highly sensitive to any potential supply reductions from Indonesia, which could lead to a rapid price rebound based on rising cost expectations [3]. Group 4: Future Outlook - The potential for further declines in nickel prices appears limited, with a preliminary bottom possibly established [4]. - Future market direction will heavily depend on the final outcomes of Indonesia's mining quota approvals and the implementation of related tax policies [4].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - Nickel's current fundamentals show no marginal improvement, with overall supply-demand expected to remain loose in January and high visible inventories putting pressure on prices [3]. - Indonesia's proposed revision of the nickel ore domestic trade pricing method and reduction of the 2026 nickel ore quota have led to significant adjustments in market expectations of nickel costs and balance, providing some support for nickel prices [3]. - The market should be wary of increased price volatility after the previous rapid rally, and short - term investors can consider buying on dips while closely monitoring the actual implementation of relevant Indonesian policies [3]. 3. Summary by Relevant Sections Market Dynamics and Reasons - On January 8, 2026, the Shanghai nickel contract plunged after a previous rapid rally, with the intraday price dropping to 13,380 tons. The LME nickel also declined significantly, with an intraday drop of over 4.5% [2]. - The sharp decline in nickel prices was mainly driven by the overall downturn in the non - ferrous sector, and the weak real - world fundamentals accelerated the decline. As of January 7, LME nickel inventories increased by over 20,000 tons to 275,600 tons, reaching a seven - year high [2]. - The uncertainty of Indonesia's policy on revising the domestic trade pricing method and the RKAB quota for nickel ore in 2026 has supported nickel prices. As of January 8, the Indonesian energy and mineral resources minister had not disclosed the specific RKAB amount and said it was still being calculated [2]. Fundamental Situation - On the supply side, China's electrolytic nickel production increased in December, and Indonesia's MHP, nickel ice, and nickel matte production remained high in December, resulting in continued supply pressure [2]. - On the demand side, it has entered the traditional off - season. Stainless steel production increased due to margin repair, but the electroplating and alloy sectors are expected to decline. Overall, the fundamentals remain in surplus, with LME nickel inventories increasing by 20,088 tons to 275,600 tons and Shanghai nickel inventories decreasing by 612 tons to 38,800 tons. Global visible inventories are still at a high level [2]. Summary and Strategy - Nickel's current fundamentals have not improved, and the overall supply - demand in January is expected to be loose. High visible inventories will suppress prices, while Indonesian policies will support prices. Attention should be paid to the actual implementation of relevant policies [3]. - The market's expectation of Indonesian policies is still strong. After the previous rapid rally, the market should be wary of increased volatility. Short - term investors can consider buying on dips and focus on the actual implementation of Indonesian policies [3].

Core Viewpoint - The nickel market is currently facing a supply expansion cycle, with production growth significantly outpacing demand, leading to concerns about supply contraction and rising costs, particularly influenced by policy changes in Indonesia [1][3][4]. Group 1: Market Dynamics - Nickel prices have recently declined, reaching a new low since 2021 in late October, while other metals like copper and aluminum have seen price increases, indicating a divergence in the market [1]. - The overall nickel market is experiencing a significant increase in production, with domestic output expected to reach approximately 360,000 tons from January to November 2025, representing a year-on-year growth of 19.34% [2]. - Global visible nickel inventories have surpassed 310,000 tons, with an increase of over 100,000 tons throughout the year, indicating high inventory levels [2]. Group 2: Cost and Pricing Pressure - Nickel prices have fallen below the cost of purchasing raw materials and some integrated processes, leading to a lack of strong cost support at current price levels [2]. - The lowest production costs in the industry continue to decline, anchoring market prices to these lower levels amid an oversupply situation [2]. Group 3: Policy Variables - Indonesia, the largest global supplier of nickel, has indicated potential significant changes in mining quotas and taxation that could impact future supply [3]. - The Indonesian Nickel Miners Association (APNI) has reported a proposed reduction in the mining output target for 2026 to approximately 250 million tons, down from 379 million tons in 2025 [3]. - Proposed adjustments to pricing and tax rules in Indonesia could increase mining costs, as cobalt and other by-products may be treated as independent commodities subject to royalties [3]. - The market is highly sensitive to any potential supply contraction from Indonesia, which could lead to a rapid price rebound based on rising cost expectations [3]. Group 4: Future Outlook - The potential for further declines in nickel prices appears limited, with a preliminary establishment of a phase bottom, heavily reliant on the final outcomes of Indonesia's mining quota approvals and tax policy implementations [4].