1. Report Industry Investment Rating - The investment view on nickel is "oscillating with a bearish bias" [1] 2. Core View of the Report - In the second half of 2025, uncertain events such as the Fed's interest - rate cut rhythm and overseas tariff policies will disrupt the market. Domestic policy support is expected to increase, and macro - sentiment will still have a phased impact on nickel prices. Fundamentally, the oversupply pattern of primary nickel is hard to change, the negative feedback from demand is intensifying, and the bottom - seeking process of nickel prices continues. If the support from the ore end weakens, it may drive the valuation of nickel prices further down. The cost of integrated MHP to produce electrowon nickel (which fluctuates with ore prices) can be used as a reference for the lower - end valuation. However, be vigilant about the impact of Indonesian policies and macro - news on nickel prices. In terms of operations, look for opportunities to build short positions on price rallies and use combination strategies such as selling out - of - the - money call options to increase returns, while controlling risks [1] 3. Summary by Relevant Catalogs 3.1 Market Review - In the first half of 2025, nickel prices first rose and then declined, with the price center shifting down. In the first quarter, policies in nickel - resource countries stimulated price increases, while in the second quarter, trade conflicts weakened demand expectations, and the oversupply situation intensified, leading to a sharp decline in nickel prices. As of June 27, the closing price of the main SHFE nickel contract was 120,480 yuan/ton, down 3.22% from the beginning of the year, and the LME nickel price at 15:00 was $15,195/ton, down 1.1% from the beginning of the year [7] 3.2 Macro - analysis 3.2.1 Overseas - The Fed's interest - rate cut rhythm remains uncertain. At the June meeting, the Fed kept interest rates unchanged, but the economic outlook shows concerns about "stagflation" in the US economy. The impact of tariff policies on inflation has not yet emerged. The Fed's dot plot shows a 50bp interest - rate cut this year, but more officials prefer not to cut rates. The Fed has also downgraded its GDP growth forecasts for 2025 and 2026, and raised its inflation and unemployment rate forecasts. The impact of tariffs on US inflation has not fully manifested yet, but there is still an upward risk of inflation in the second half of the year [12][13][20] 3.2.2 Domestic - The domestic economy is running steadily, but there are still pressures for stable growth. In May 2025, China's manufacturing PMI rebounded, and new export orders increased after the Sino - US economic and trade talks. However, due to the repeated US tariff policies, there is still a risk of decline in external demand. In terms of imports and exports, exports increased year - on - year in May, but the growth rate slowed down, and imports declined. In terms of credit, the social financing and credit data in May improved slightly, but the financial data has not yet shown strong momentum. It is expected that the central bank may continue to cut interest rates, and fiscal policy will further strengthen in the second half of the year [23][24][26] 3.3 Fundamental Analysis 3.3.1 Supply - side - **Indonesian Ore End**: The PNBP policy in Indonesia has increased the cost of nickel ore sales and use, and the policy may accelerate the clearance of some high - cost production capacities. The supply gap of Indonesian nickel ore can be supplemented by importing from the Philippines. The premium of Indonesian nickel ore is relatively firm, but the demand negative feedback may affect the ore price, and the downward space for high - grade ore prices is limited. In the first half of 2025, China's nickel ore imports decreased year - on - year, and port inventories showed a seasonal decline [29][32][40] - **Nickel Iron**: China's nickel iron production continued to decline year - on - year in the first five months of 2025. In Indonesia, new pyrometallurgical projects were put into production in the first half of the year, and the production of nickel iron increased year - on - year, but there were some production cuts due to cost - price inversion. In the second half of the year, the contraction of stainless steel production may affect the demand for nickel iron, and the profit of Indonesian iron plants may be under pressure. The number of Indonesian nickel iron projects to be put into production in the second half of the year has decreased compared with previous years [43][44] - **Nickel Intermediate Products**: In the first five months of 2025, the import of nickel hydrometallurgical intermediate products and nickel matte increased year - on - year, but the growth rate of intermediate products slowed down. The production of Indonesian MHP increased significantly year - on - year, and the production of high - grade nickel matte decreased year - on - year. In the second half of the year, more attention should be paid to the commissioning of wet - process projects [51][54][55] - **Pure Nickel**: In the first five months of 2025, China's refined nickel production continued to climb, but the growth rate slowed down. Both imports and exports of refined nickel increased significantly. The cost of integrated MHP to produce electrowon nickel and high - grade nickel matte has increased, and the cost range of integrated electrowon nickel will be the focus of pure - nickel valuation in the second half of the year [59][64][67] 3.3.2 Demand - side - **Stainless Steel**: In the first five months of 2025, China's stainless steel production increased year - on - year, and in June, Tsingshan reduced production. In Indonesia, stainless steel production increased slightly year - on - year in the first half of the year, but production is expected to decline in the third quarter. The apparent consumption of stainless steel increased year - on - year, but the terminal demand is weak. The export of stainless steel increased year - on - year in the first five months, but the impact of tariffs on exports is gradually emerging. It is estimated that the annual demand growth rate of stainless steel is about 3% [69][74] - **Nickel Sulfate**: In the first five months of 2025, China's nickel sulfate production decreased year - on - year. The MHP coefficient remained firm due to the supply disruption of cobalt. The production and sales of new energy vehicles remained high, but the proportion of ternary batteries in power - battery loading continued to be low, which had a negative impact on nickel demand. The consumption of nickel in alloy and special steel increased year - on - year, with a growth rate of 3.6% in the first five months [80][84][88]