Report Industry Investment Rating No relevant content provided. Core Viewpoints - For nickel, the support at the mine end is marginally loosening, and the logic at the smelting end restricts the upside elasticity. The downside space of nickel prices depends on the support at the mine end. The news of increased quotas in Indonesia affects the mine - end expectations, and the third quarter is often the stage of quota release and premium callback. In July, the premium of Indonesian nickel ore may slightly decline. The convergence of the economic difference between Philippine and Indonesian ore prices may limit the upside elasticity of Indonesian nickel ore. After the mine - end logic becomes less significant, if pricing returns to the smelting - end fundamentals, the upside elasticity may be pressured by supply elasticity. In July, the stainless - steel production in China and Indonesia stabilizes, nickel - iron inventory accumulates to a historical high, and the negative feedback pressures the nickel - iron valuation, which restricts the upside elasticity of refined - nickel valuation. The inventory accumulation in the refined - nickel segment is less than expected, while the operating capacity increases marginally, and supply elasticity limits the upside space [1]. - For stainless steel, it operates with weak supply and demand, the inventory has a slight reduction, and the steel price is marginally repaired but with limited upside elasticity. The macro - expectation improves marginally, boosting the market. However, the tariff increase on household appliances containing steel parts in the US and the weak short - term off - season demand lead to negative feedback on supply. In July, the marginal supply - demand may remain weak. After the negative feedback leads to a decline in actual supply, the overall high factory inventory slightly decreases, and the social inventory marginally reduces. If the production - cut expectation is continuously verified in the inventory, the suppression of stainless - steel profit by over - supply may ease, but the overall cost center moves down, and the raw - material end of nickel - iron gives up profits, limiting the upside repair elasticity of steel prices [2]. Summary by Related Catalogs Nickel and Stainless - Steel Fundamentals - **Nickel fundamentals**: The support at the mine end is marginally loosening, and the smelting - end logic restricts the upside elasticity. The news of increased Indonesian quotas affects mine - end expectations, and the third - quarter is a stage of quota release and premium callback. The convergence of the economic difference between Philippine and Indonesian ore prices may limit the upside elasticity of Indonesian nickel ore. After the mine - end logic fades, the upside elasticity may be pressured by supply elasticity. The inventory accumulation in the refined - nickel segment is less than expected, and the operating capacity increases marginally [1]. - **Stainless - steel fundamentals**: It operates with weak supply and demand, the inventory has a slight reduction, and the steel price is marginally repaired but with limited upside elasticity. The macro - expectation improves marginally, but the tariff increase in the US and weak short - term demand lead to negative feedback on supply. In July, the marginal supply - demand may remain weak. The production in China and Indonesia has different trends, and after the negative feedback on supply, the factory inventory slightly decreases, and the social inventory marginally reduces [2]. Inventory Changes - **Nickel inventory**: The social inventory of refined nickel in China increases by 120 tons to 36,591 tons, with a decrease in warehouse - receipt inventory and an increase in spot inventory, and the bonded - area inventory remains unchanged. The LME nickel inventory decreases by 846 tons to 204,294 tons. The nickel - iron inventory in mid - June increases year - on - year and month - on - month, and the port nickel - ore inventory in China increases by 199,900 wet tons to 7.5923 million wet tons [3][5]. - **Stainless - steel inventory**: The total social inventory of stainless steel decreases by 0.25% week - on - week. The cold - rolled stainless - steel inventory decreases, while the hot - rolled stainless - steel inventory increases. The inventory of the 300 - series stainless steel also shows a decrease in the total and cold - rolled inventory and an increase in the hot - rolled inventory [3]. Market News - Canada's Ontario Province may stop exporting nickel to the US due to tariff threats [6]. - The first - phase project of Indonesia's CNI nickel - iron RKEF successfully produces nickel - iron and enters the trial - production stage, with an annual production of about 12,500 tons of metallic nickel per line [6]. - A nickel smelter in an important Indonesian metal - processing park resumes production, and the capacity of the Indonesian QMB New Energy Materials has recovered to 70% - 80% [6]. - An Indonesian cold - rolling mill suspends production for maintenance from June to July, which may affect the production of 110,000 - 130,000 tons, mainly of the 300 - series [6]. - The Philippine Nickel Industry Association welcomes the decision to remove the raw - ore export ban from the final version of the mining fiscal - system bill [7]. - Environmental violations are found in the Indonesian Morowali Industrial Park, and the relevant department may fine the confirmed illegal companies and audit the entire park [7]. Weekly Key Data Tracking - **Futures data**: The closing prices, trading volumes, and other relevant data of Shanghai nickel and stainless - steel futures, as well as the prices, premiums, and spreads of related products such as imported nickel, nickel - iron, and stainless - steel products, are presented in the table, showing different trends compared with previous periods [10].

Report Industry Investment Rating No relevant content provided. Core Views - The price of nickel is expected to continue narrow - range fluctuations. The Indonesian nickel ore policy and smelting - end inventory performance may limit the downside elasticity, while the upside elasticity may be constrained by conversion economics and long - term surplus expectations [1]. - Stainless steel has weak marginal supply and demand, may oscillate at a low level in the short term, and has a slight chance of recovery in the medium term. The valuation of stainless steel still centers on cost, and cost support may underpin the bottom space [2]. Summary by Related Catalog Nickel Fundamentals - Indonesian high - grade nickel ore shortage drives up the cost of integrated pyrometallurgy. The premium of 1.6% nickel ore rises by $2 to $27 - 28 per wet ton, and the total price increases by 25% year - on - year to $53.6 per wet ton [1]. - Due to the impact of restocking demand, the short - term inventory accumulation at home and abroad under the expectation of refined nickel surplus is less than expected, and the inventory even shows a slight decline [1]. - The negative feedback of stainless steel exerts pressure on ferronickel, and ferronickel inventory starts to accumulate again. In mid - May, the SMM ferronickel inventory was 29,554.5 tons, a year - on - year and month - on - month increase of 36% and 4% respectively [1][4]. - The conversion window from ferronickel to high - grade nickel matte has opened on the futures market, which may drag down the upper valuation of refined nickel [1]. Stainless Steel Fundamentals - Stainless steel has weak marginal supply and demand. The seasonal destocking speed of stainless steel is slower than in previous years under the previous high - production pattern. Although tariff relaxation may relieve some export pressure, there is no substantial change in the overall negative feedback stage [2]. - In May, the stainless steel production plan of Zhonglian Jin was 3.425 million tons, a year - on - year and month - on - month increase of 2% and 0% respectively, with a cumulative year - on - year increase of 5%. Among them, the production plan of 300 - series stainless steel in May was 1.706 million tons, a year - on - year and month - on - month decrease of 2% and 3% respectively, with a cumulative year - on - year increase of 3%, and the year - on - year growth rate has converged, especially for the 300 - series [2]. - The profit margin of stainless steel is difficult to expand significantly, and its valuation still centers on cost. After the price of ferronickel decreases, the futures steel price is still lower than the spot cost. If calculated at 950 yuan per nickel, the cash cost of stainless steel is about 13,000 yuan per ton [2]. - The contradiction in the ore end may limit the bottom space of ferronickel. In late May, the premium of nickel ore may rise by another $2 to $27 - 28 per wet ton, and the total price increases by 25% year - on - year to $53.6 per wet ton. According to the full - cost estimate of Indonesian ferronickel, Indonesian ferronickel may have suffered certain losses [2]. Inventory Changes - China's refined nickel social inventory decreased by 763 tons to 42,928 tons. Among them, warehouse receipt inventory increased by 75 tons to 23,501 tons, spot inventory decreased by 838 tons to 12,957 tons, and bonded area inventory remained unchanged at 6,470 tons. LME nickel inventory decreased by 2,448 tons to 195,222 tons [3]. - The ferronickel inventory at the end of mid - May according to Yousewang was 29,554.5 tons, a year - on - year and month - on - month increase of 36% and 4% respectively, and the inventory pressure increased marginally [4]. - The stainless steel social inventory was 1,108,250 tons, a week - on - week decrease of 0.42%. Among them, the cold - rolled stainless steel inventory was 675,382 tons, a week - on - week decrease of 3.71%, and the hot - rolled stainless steel inventory was 432,868 tons, a week - on - week increase of 5.17% [4]. - The nickel ore inventory at 14 Chinese ports increased by 97,200 wet tons to 7.0624 million wet tons. All the nickel ore was from the Philippines. By grade, the low - nickel and high - iron ore was 3.4012 million wet tons, and the medium - and high - grade nickel ore was 3.6612 million wet tons [6]. Market News - The Indonesian government has proposed relevant adjustment suggestions for non - tax national revenues. The resource tax rates for nickel ore, ferronickel, nickel pig iron, and nickel sulfide have been increased from 10%, 2%, 5%, and 2% to the floating ranges of 14% - 19%, 5% - 7%, 5% - 7%, and 4.5% - 6.5% respectively. The new nickel product royalty policy was officially signed by the Indonesian President on April 11 and implemented on April 26 [7]. - On March 3, Ontario Premier Ford in Canada proposed that Ontario's minerals are also crucial in the tariff struggle and may stop exporting nickel to the United States in response to the US tariff threat [7]. - On April 27, the first - phase project of the Indonesian CNI ferronickel RKEF, EPC - contracted by China ENFI, successfully produced ferronickel, marking the project's entry into the trial - production stage. The project is located in Southeast Sulawesi, Indonesia, producing 22% - grade ferronickel, with an annual output of about 12,500 tons of nickel metal per line [7]. - An important nickel smelter in an Indonesian metal processing park has resumed production. In March this year, the plant almost halted all production due to a fatal landslide in the tailings reservoir area. As of now, the production capacity of PT QMB New Energy Materials, jointly held by GEM Co., Ltd., Tsingshan Holding Group, and Guangdong Brunp Recycling Technology Co., Ltd., has recovered to 70% - 80% [8]. - In February, the Philippine media reported that the parliament was discussing a bill to ban nickel ore exports, which was in the deliberation stage of the two - house committee. Once signed into law, it will take effect in five years. On May 9, there was news that the Philippine government planned to implement a nickel ore export ban starting from June 2025, but the authenticity and start date are still to be verified [8]. - From May 10 to 11, high - level China - US economic and trade talks were held in Geneva, Switzerland. On May 12, the two sides issued a joint statement. The US promised to cancel 91% of the tariffs imposed on Chinese goods according to Executive Orders No. 14259 on April 8, 2025, and No. 14266 on April 9, 2025, and modify the 34% reciprocal tariffs imposed on Chinese goods according to Executive Order No. 14257 on April 2, 2025. Among them, 24% of the tariffs will be suspended for 90 days, and the remaining 10% will be retained. Correspondingly, China will cancel 91% of the counter - tariffs on US goods, suspend 24% of the 34% counter - tariffs on US reciprocal tariffs for 90 days, and retain the remaining 10%. China will also suspend or cancel non - tariff counter - measures against the US [9]. Weekly Key Data Tracking The report provides a table of weekly key data tracking for nickel and stainless steel, including closing prices, trading volumes, premiums, and other indicators of futures contracts and related products [11].