1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The nickel and stainless - steel markets experienced a collective correction, with significant price drops. For nickel, the decline was driven by macro - tightening expectations, external market falls, high inventory, and panic selling by long - position holders. For stainless steel, the drop was due to cost breakdown caused by the fall in nickel prices, macro - hawkish expectations, and weak pre - holiday demand [1][3] - Although prices are volatile and the Spring Festival holiday is approaching, nickel ore supply disruptions support the cost side. If prices fall significantly, it may be advisable to go long at low prices [3][4] 3. Summary by Related Catalogs Nickel Variety Market Analysis - On February 2, 2026, the main nickel contract 2603 on the Shanghai Futures Exchange opened at 138,000 yuan/ton and closed at 129,650 yuan/ton, a change of - 11.00% from the previous trading day. The trading volume was 808,140 (- 204,303) lots, and the open interest was 110,945 (- 21,503) lots [1] - The core drivers for the sharp drop in the nickel futures price were the increase in macro - tightening expectations, the negative impact from the fall in the London nickel market, high inventory, and panic selling by long - position holders. The nomination of Warsh by Trump as the new Fed chairman led to an increase in hawkish expectations, a stronger US dollar, a rise in US Treasury yields, and a general decline in commodities. The high domestic refined nickel inventory and weak pre - holiday stocking demand also put pressure on prices. The high premium of refined nickel over nickel iron led to an increase in the conversion of nickel iron to high - grade nickel matte, further hitting the spot market [1] - In the nickel ore market, in the Philippines, due to the high - price transactions of northern mines last week, traders were firm in their price - holding stance, pushing up the CIF price negotiation center in China. The price of 1.3% grade nickel ore rose to $48/wet ton, and the price range of 1.5% grade nickel ore reached $59 - 62. In Indonesia, the HPM benchmark price in the first phase of February increased by about $2 - 3, and the market premium rose by another $3 - 5, resulting in a one - time significant increase of $5 - 8 in the cost of mainstream pyrometallurgical nickel ore at the factory. The price of hydrometallurgical ore also rose by $2 - 3 [2] - In the spot market, the sales price of Jinchuan Group in the Shanghai market was 143,800 yuan/ton, a decrease of 6,300 yuan/ton from the previous trading day. Spot trading was scarce, and the spot premiums of various refined nickel brands increased. The premium of Jinchuan nickel changed by 1,500 yuan/ton to 8,750 yuan/ton, the premium of imported nickel changed by - 100 yuan/ton to - 50 yuan/ton, and the premium of nickel beans was 2,450 yuan/ton. The previous trading day's Shanghai nickel warehouse receipts were 46,574 (- 302) tons, and the LME nickel inventory was 285,528 (- 756) tons [2] Strategy - Given the large price fluctuations and the approaching Spring Festival holiday, it is necessary to pay attention to position - holding risks. It is recommended to mainly conduct range trading. However, due to the continuous fermentation of nickel ore supply disruptions, which support the cost side, if the price drops significantly, one can consider going long at low prices [3] - Unilateral: Mainly conduct range trading; Cross - period: None; Cross - variety: None; Spot - futures: None; Options: None [3] Stainless Steel Variety Market Analysis - On February 2, 2026, the main stainless - steel contract 2603 opened at 14,100 yuan/ton and closed at 13,420 yuan/ton. The trading volume was 360,562 (- 47,479) lots, and the open interest was 83,445 (- 4,171) lots [3] - The core drivers for the sharp drop in the stainless - steel futures price were the cost breakdown caused by the fall in the Shanghai nickel price, the increase in macro - hawkish expectations, and weak pre - holiday demand. The fall in the main nickel contract on the Shanghai Futures Exchange led to a联动 decline in the prices of nickel iron and high - grade nickel matte, significantly weakening the cost support for stainless steel. The cost premium brought by the previous rise in nickel prices quickly declined, forcing the futures price to fall. In terms of fundamentals, the domestic stainless - steel inventory has been increasing for two consecutive weeks, with ample supply and weak pre - holiday stocking demand from downstream, and high inventory has suppressed prices. The spot market transactions were weak, and traders sold at discounted prices, leading to a weakening of the spot - futures linkage [3][4] - In the spot market, due to the weakening of the futures market, downstream purchasing enthusiasm was low, and they mainly purchased on - demand, resulting in a slowdown in inventory depletion. The stainless - steel price in the Wuxi market was 14,300 (- 100) yuan/ton, and in the Foshan market, it was 14,200 (- 150) yuan/ton. The premium of 304/2B was 460 to 760 yuan/ton. According to SMM data, the ex - factory tax - included average price of high - nickel pig iron changed by - 15.00 yuan/nickel point to 1,039.0 yuan/nickel point [4] Strategy - Given the large price fluctuations and the approaching Spring Festival holiday, it is necessary to pay attention to position - holding risks. It is recommended to mainly conduct range trading. However, due to the continuous fermentation of nickel ore supply disruptions, which support the cost side, if the price drops significantly, one can consider going long at low prices [4] - Unilateral: Mainly conduct range trading; Cross - period: None; Cross - variety: None; Spot - futures: None; Options: None [4]

Core Viewpoint - Nickel prices are experiencing a significant decline due to a combination of high inventory levels, weak demand, and macroeconomic pressures, leading to a bearish outlook in the short term [2][3][5]. Group 1: Market Performance - As of January 19, the Shanghai nickel futures market saw the main contract close at 142,320 CNY/ton, down 2,050 CNY/ton, a decrease of 1.42% [1]. - The average price for 1 nickel in the Changjiang market was reported at 146,400 CNY/ton, down 2,100 CNY from the previous day [1]. Group 2: Macroeconomic Factors - Hawkish signals from Federal Reserve officials and strong economic data have dampened expectations for early interest rate cuts, maintaining a high USD index that pressures commodity prices, including nickel [2]. - Structural monetary policies in China have been implemented, but their impact on real demand is delayed, particularly during the traditional off-season [2]. Group 3: Supply and Demand Dynamics - The market is facing a significant contradiction between high inventory levels and weak demand, with global visible inventories at high levels indicating a loose supply situation [3]. - The traditional stainless steel sector, which constitutes a major part of nickel consumption, is currently in a seasonal downturn, leading to low purchasing willingness for high-cost raw materials [3]. Group 4: Industry Chain and Market Sentiment - Profit distribution within the industry is shifting towards upstream resource sectors, while downstream sectors face pressure from high costs and weak orders, resulting in a narrow profit margin [4]. - The market is characterized by low trading activity and declining premiums, as traders are eager to sell while downstream buyers only engage in essential purchases [4]. Group 5: Future Outlook - Nickel prices are expected to remain weak in the short term as the market seeks to digest high inventory pressures and await clear signs of demand recovery [5]. - Despite the current price adjustments, the long-term fundamentals remain intact, supported by the ongoing supply contraction from Indonesia and structural demand growth from the energy transition [5].