Core Viewpoint - Nickel prices are experiencing an upward trend driven by positive macroeconomic sentiment and strong fundamental support, with the main contract reaching 134,520 yuan/ton, an increase of 1.45% [2][11] Supply Side - Global nickel supply is significantly contracting due to a 34% reduction in Indonesia's nickel mining quota for 2026 compared to 2025, leading to a decrease of nearly 400,000 tons in global nickel production [3] - Seasonal disruptions in mining operations in the Philippines and Indonesia, along with cost increases causing small miners to reduce or halt production, are contributing to a widening supply gap [3] Demand Side - As the Spring Festival approaches, downstream stainless steel and new energy battery companies are actively replenishing inventory, creating a strong demand for nickel [4] - Traders are holding back inventory in anticipation of price increases, further tightening market liquidity and pushing nickel prices higher [4] Industry Chain Interaction - The nickel industry chain is showing strong interconnectivity, with rising upstream costs providing price support and robust demand from both stainless steel and new energy sectors maintaining a solid foundation for prices [5] - There are no significant signs of weakness in the industry chain as the Spring Festival approaches [5] Upstream Mining - The nickel ore market is characterized by a "hot outside, cold inside" dynamic, with Philippine ore prices rising due to global demand, while domestic prices are under pressure [6] - Domestic mining costs are facing a backwardation situation, with strong pricing intentions from midstream smelting operations [6] Midstream Smelting - Rising ore prices are increasing production costs for nickel iron and refined nickel, leading companies to maintain prices to protect profit margins [7] - Domestic refined nickel production growth is slowing, and some capacity is being shifted, resulting in no increase in midstream supply, which further supports price stability [7] Downstream Consumption - The core demand from both stainless steel and new energy sectors remains strong, with an increase in nickel consumption in stainless steel production and sustained demand for high-nickel batteries in new energy vehicles [8] - The consumption of nickel in the new energy vehicle sector is expected to provide long-term upward momentum for nickel prices [8] Market Activity - The midday trading of nickel showed increased activity, with strong demand for immediate purchases and sellers holding back inventory, leading to a high premium for spot prices [10] - Overall trading volume remained stable, with prices rising and no signs of a pullback in the near term [10] Short-term Outlook - Nickel prices are expected to continue a strong upward trend, with the main contract likely trading between 133,000 and 136,000 yuan/ton in the coming days [10] - The weak dollar and recovering risk appetite in the U.S. stock market are supporting macroeconomic sentiment, while supply constraints from Indonesia and pre-holiday demand are solidifying price support [10]