Core Insights - The chairman of the Indonesian Nickel Industry Forum (FINI), Arif Perdanakusumah, warned that several nickel smelters in Indonesia may halt production if nickel ore supply remains tight [1][2] - Indonesia, holding about 45% of the world's nickel reserves, is facing a supply-demand imbalance as domestic nickel ore supply has not kept pace with the rapid expansion of smelting facilities [1][2] - The country is projected to import over 10.4 million tons of nickel ore from the Philippines in 2024, with expectations to increase to approximately 15 million tons in 2025 [1] - The nickel price may surge due to tight supply, leading to high production costs and potential shutdowns of smelting plants, which could also hinder investments in Indonesia's battery and electric vehicle sectors [1] - The nickel export ban implemented in 2020 has attracted investments in Indonesia's downstream nickel industry, with smelting capacity expected to reach 1.8 million tons of secondary nickel and about 395,000 tons of primary nickel by 2024 [1] Industry Dynamics - Indonesia currently holds over 60% of the global nickel market share, becoming a significant player in the stainless steel and battery materials sectors [2] - The government has shortened the effective period of mining production quotas (RKAB) from three years to one year, tightening domestic supply amid increasing demand from smelting plants [2] - The imbalance between mineral supply and industrial demand is worsening due to the rapid expansion of smelting facilities and the shortened planning cycle for mining operations [2] - To alleviate the tight nickel ore supply, Arif urged the Indonesian government to prioritize the approval of RKAB applications for mines associated with smelting plants and to enhance exploration efforts and mining technology capabilities [2] - A solid upstream planning is essential to avoid the absurd situation of relying on imported nickel ore, ensuring that local industries in this resource-rich country do not face raw material shortages [2]

Market Overview - The stainless steel market is experiencing weak trading sentiment, with end-user purchases primarily driven by necessity, and traders reporting orders mainly for small to medium-sized replenishments [3] - The macroeconomic environment remains stable, with the Federal Reserve maintaining a hawkish stance and keeping the federal funds rate target range at 4.25%-4.5% [3] Price Trends - As of June 4, the price of Wuxi Hongwang 304 cold-rolled steel is 13,100 CNY/ton, unchanged from the previous day, while the price in Foshan is 13,050 CNY/ton, down by 50 CNY/ton [1] - The domestic nickel iron market is stable, with prices around 960-970 CNY/nickel (including tax) [1] Supply and Production - In May, the estimated crude steel output from 43 domestic stainless steel mills is 3.4899 million tons, a month-on-month decrease of 0.4% but a year-on-year increase of 5.8% [1] - The production of the 300 series is 1.776 million tons, down 2.6% month-on-month but up 7.5% year-on-year [1] Inventory Levels - Social inventory data shows a weekly decline, with Wuxi and Foshan 300 series social inventory at 510,800 tons, down 20,200 tons week-on-week [2] - As of June 4, stainless steel futures inventory is 124,391 tons, a decrease of 10,220 tons week-on-week [2] Supply Chain Dynamics - The nickel ore market in the Philippines is facing shipment delays due to rainfall, with no transactions finalized yet [1] - Indonesian nickel ore domestic benchmark prices have decreased by approximately $0.02, with supply remaining tight due to the rainy season [1][3] Market Outlook - The overall supply-demand balance remains under pressure, with expectations of weak fluctuations in the market, and the main trading range is anticipated to be between 12,600 and 13,200 CNY [4]