Group 1 - Nickel prices in Shanghai experienced a decline followed by a rebound, with the main contract 2601 dropping to 111,770 yuan/ton before rising above 120,000 yuan/ton due to positive news from Indonesia [1] - Indonesia's nickel mining association announced plans to reduce nickel ore quotas to approximately 250 million wet tons by 2026, significantly lower than the 379 million wet tons in 2025, aiming to control supply and stabilize prices [2] - The Indonesian government indicated that the quota adjustments require rigorous research and are still under internal discussion, leading to uncertainty about the implementation of these policies [2] Group 2 - Demand for nickel in the stainless steel sector remains weak despite some improvement in trading atmosphere, with insufficient end-user purchasing activity [3] - The automotive sector shows growth in new energy vehicle production and sales, but the demand for nickel from ternary battery manufacturers is still weak, with a decline in nickel sulfate production [3] - Supply of refined nickel remains abundant, with social inventory in China reaching 56,988 tons, a 35% year-on-year increase, and LME nickel inventory at 254,388 tons, up 56% year-on-year [4] Group 3 - The cost of producing refined nickel is closely tied to the economic viability of nickel wet process intermediates (MHP), with production costs for MHP and high-grade nickel at 111,026 yuan/ton and 124,817 yuan/ton respectively [4] - The overall market for refined nickel is characterized by oversupply and significant inventory pressure, with short-term price movements dependent on potential supply reductions from Indonesia [4] - Caution is advised regarding the potential for further price rebounds, as the actual implementation of Indonesian policies remains uncertain [4]

Core Viewpoint - Nickel prices have been on a downward trend, with the Shanghai nickel main contract hitting a nearly five-year low of 113,980 yuan/ton on November 21, driven by revised Federal Reserve interest rate expectations, accelerated accumulation of refined nickel inventories, and ongoing supply-demand imbalances [1] Demand Structure - In the nickel industry demand structure from January to October 2025, stainless steel, power batteries, alloys, and electroplating accounted for 78.2%, 13.4%, 5.6%, and 1.6% of nickel consumption, respectively, totaling 98.6% [1] - The demand for stainless steel is significantly affected by the real estate sector, which has not shown substantial improvement, leading to continued pressure on stainless steel demand [1] - In the power battery sector, the market share of ternary materials has decreased to around 20% due to the cost advantages of lithium iron phosphate materials, while solid-state batteries are expected to become a key growth driver for nickel demand, although large-scale commercialization is not anticipated until 2030 [1] Alloy and Electroplating Demand - In the alloy sector, nickel consumption is projected to reach approximately 156,000 metal tons in 2025, an increase of 13,000 metal tons from 2024, but the overall contribution to total nickel demand remains limited [2] - Nickel demand in the electroplating sector has remained stable, averaging between 50,000 to 60,000 metal tons annually over the past five years [2] Supply and Production Trends - The supply of nickel intermediate products (MHP) has been growing significantly faster than high-grade nickel due to economic advantages, better raw material adaptability, and superior environmental compatibility [3] - As of October 2025, the profit margins for producing nickel sulfate and refined nickel using MHP are significantly higher than those for high-grade nickel, indicating a shift in production profitability [3] Inventory and Market Outlook - Domestic refined nickel supply is expected to continue increasing in 2025, with accelerated accumulation of inventories observed since the third quarter of this year [5] - Major refined nickel producers, particularly those with their own nickel mines or integrated projects in Indonesia, are likely to maintain profitability and market share despite challenges faced by smaller firms [5] - The overall supply-demand landscape for 2026 suggests that refined nickel demand will not see significant growth, while the continued release of low-cost MHP capacity will keep supply high, leading to a projected nickel price range of 100,000 to 125,000 yuan/ton [5]