1. Report Industry Investment Rating - No information provided regarding the industry investment rating 2. Core Viewpoints of the Report - The nickel and stainless - steel markets are expected to maintain a volatile trend in the short term. For nickel, the market is in a state of game between policy and fundamentals, and it will likely remain in a range - bound oscillation. For stainless steel, it will follow the nickel price trend and also maintain an oscillatory state due to the influence of macro and policy factors [1][3][5] 3. Summary by Related Catalogs Nickel Variety Market Analysis - On March 31, 2026, the opening price of the main Shanghai nickel contract was 137,080 yuan/ton, and the closing price was 134,780 yuan/ton, a change of - 0.83% from the previous trading day. The trading volume was 290,411 (- 45,931) lots, and the open interest was 164,700 (- 11,544) lots [1] - The nickel market is in a state of game between policy and fundamentals. Policywise, the Indonesian export tax and nickel ore quota are still uncertain, but they support the price. Fundamentally, on the supply side, the nickel ore shortage continues, and the price of nickel ore is expected to rise. The supply of nickel iron and refined nickel is sufficient, but the cost is stably supported. The production of MHP is hindered, and the price remains strong. On the demand side, the profit of stainless - steel mills has improved, providing stable demand support. In the new - energy sector, the production and sales of new - energy vehicles meet expectations, but it is in the off - season, with limited month - on - month improvement. Ternary batteries contribute a small increase in demand, while downstream enterprises have weak procurement willingness and mainly make rigid - demand purchases [1] Nickel Ore and Spot - According to Mysteel, the premium of Indonesian nickel ore still has room to rise, and the RKAB quota approval progress is slow. The premium of the mainstream pyrometallurgical ore plants is likely to remain stable next month, and some may increase by 1 - 2 dollars/wet ton. The domestic trade ore price still has upward momentum. The price of Philippine nickel ore is weakening, and the traders' quotes are loosening. The 1.3% grade is quoted at 48 - 50 dollars/wet ton, and the CIF receiving price of the 1.4% grade is 71 dollars. Ocean freight may continue to decline, and the cost - side pressure is marginally relieved [2] - The Shanghai nickel price oscillated weakly during the day, and the center of the refined nickel spot price moved slightly downward. The premium of Jinchuan nickel decreased, while that of other brands remained stable, with sufficient overall supply. Market trading became lighter, and downstream enterprises only made rigid - demand purchases, with strong wait - and - see sentiment and insufficient willingness to chase high prices. The implementation of the Indonesian export tax is uncertain, the cost support at the ore end is stable, the domestic refined nickel production is at a high level, and the spot resources are sufficient. The premium of Jinchuan nickel changed by - 1,000 yuan/ton to 3,750 yuan/ton, the premium of imported nickel changed by 0 yuan/ton to - 350 yuan/ton, and the premium of nickel beans was 2,450 yuan/ton. The previous trading day's Shanghai nickel warehouse receipt volume was 57,858 (+ 685) tons, and the LME nickel inventory was 281,526 (- 48) tons [2] Strategy - In the short term, Shanghai nickel will likely maintain a range - bound oscillation. The recommended strategy for a single - side position is to conduct range - based operations. There are no recommended strategies for inter - period, cross - variety, spot - futures, or options trading [3] Stainless - Steel Variety Market Analysis - On March 31, 2026, the opening price of the main stainless - steel contract was 14,170 yuan/ton, and the closing price was 14,160 yuan/ton. The trading volume was 118,510 (- 1,569) lots, and the open interest was 97,783 (- 4,171) lots [3] - Stainless - steel prices mainly follow the nickel price trend and are greatly affected by Indonesian policies and the macro - environment. On the supply side, steel mills maintain high production plans. According to Mysteel statistics, the estimated crude - steel production of 43 domestic stainless - steel plants in March 2026 was 3.6995 million tons, a month - on - month increase of 0.9895 million tons, an increase of 36.51%, and a year - on - year increase of 5.34%. The planned production in April is 3.6847 million tons, a month - on - month decrease of 0.4% and a year - on - year increase of 5.2%. On the demand side, it has entered the traditional consumption peak season, and downstream demand is stable, but it is mainly on - demand procurement without stockpiling. In April, consumption is expected to continue to recover, orders will ease, and inventory is unlikely to rise, providing bottom support for prices [4] - Although the futures market has weakened, the stainless - steel spot market is generally stable, and traders' quotes mostly remain unchanged. Downstream terminals maintain rigid - demand purchases. The stainless - steel price in the Wuxi market is 14,400 (+ 0) yuan/ton, and that in the Foshan market is 14,400 (+ 0) yuan/ton. The premium of 304/2B is 270 - 470 yuan/ton. According to SMM data, the ex - factory tax - inclusive average price of high - nickel pig iron yesterday remained unchanged at 1,083.0 yuan/nickel point [4] Strategy - In the short term, stainless - steel will follow the nickel price trend and is expected to maintain an oscillatory state. The recommended strategy for a single - side position is neutral. There are no recommended strategies for inter - period, cross - variety, spot - futures, or options trading [5]

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - The nickel market is affected by pre - holiday capital outflows, and the medium - term contradiction lies in Indonesia; the stainless - steel market has frequent maintenance and production cuts in February, and the cost support center has shifted upward [1] - The trend intensities of both nickel and stainless steel are neutral, with a value of 0 [7] 3. Summary by Related Catalogs 3.1 Fundamental Tracking - **Futures Data**: The closing price of the Shanghai nickel main contract is 131,840, down 2,590 compared to T - 1; the closing price of the stainless - steel main contract is 13,670, down 140 compared to T - 1. The trading volume of the Shanghai nickel main contract is 554,444, down 28,080 compared to T - 1; the trading volume of the stainless - steel main contract is 287,657, down 42,500 compared to T - 1 [1] - **Industrial Chain Data**: The price of 1 imported nickel is 130,900, down 4,300 compared to T - 1; the price of 8 - 12% high - nickel pig iron (ex - factory price) is 1,040, up 3 compared to T - 1. The price of 304/2B roll - rough edge (Wuxi) Hongwang/Beibuwan is 14,100, unchanged compared to T - 1; the price of 304/2B roll - trimmed edge (Wuxi) Taiyuan Iron and Steel/Zhangpu is 14,650, unchanged compared to T - 1 [1] 3.2 Macro and Industry News - The Indonesian government has suspended issuing new smelting licenses through the OSS platform for projects producing "restricted products" such as Nickel matte, MHP, FeNi, and NPI [1] - The Chinese Ministry of Commerce and the General Administration of Customs have decided to implement export license management for some steel products starting from January 1, 2026 [2] - The Indonesian Ministry of Energy and Mineral Resources will revise the benchmark price formula for nickel ore commodities in early 2026, and will start treating cobalt as an independent commodity and collecting royalties [2] - The Indonesian government plans to significantly reduce the 2026 nickel ore production target from 379 million tons to 250 million tons [4] - Some Indonesian mines are facing potential fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land, and are negotiating with the government [4] - The Indonesian Minister of Energy and Mineral Resources said that the 2026 nickel ore production quota will be adjusted according to industry demand, and the production may be around 250 - 260 million tons [4] - The KPPU found monopoly behavior in the port storage and logistics of the IMIP park in Indonesia, and the park is negotiating with the KPPU [4] - A Singapore - flagged bulk carrier carrying about 50,000 tons of nickel ore sank on its way from the Philippines to Yangjiang, China [5] - The Indonesian Ministry of Energy and Mineral Resources has started approving the 2026 mining work plan and budget (RKAB) [5] - The Solway Investment Group plans to restart its nickel mine business in Guatemala in a few months due to the rebound in nickel prices and the lifting of restrictions [5] - The Indonesian investment department said that the Indonesian Qing Shan Stainless Steel Co., Ltd. under Tsingshan Holding Group has never submitted an investment activity report [6]

Group 1 - The domestic futures market for non-ferrous metals is showing a predominantly positive trend, with nickel futures experiencing a significant increase, reaching a peak of 137,770.00 yuan/ton, marking a rise of approximately 3.07% [1] - The current nickel market is characterized by a strong upward trend, supported by concerns over tight resource supply and rising boundary costs, despite a seasonal increase in stainless steel inventory due to the Chinese New Year [2] - Analysts from various institutions highlight that the supply-demand dynamics for nickel are improving, with expectations of a 10% to 15% decrease in nickel ore production from Indonesia, which could positively impact the market [2][3] Group 2 - The macroeconomic environment and overall market conditions are currently influencing nickel prices, with a strong US dollar previously causing declines in dollar-denominated metals [3] - The supply side is expected to remain tight due to seasonal weather impacts in major mining regions, which may limit production and shipping volumes [3] - There is a cautious sentiment in the market regarding further purchases at high prices, as many manufacturers have completed their pre-holiday stockpiling [3]

Summary of Cobalt Market Outlook and Key Insights Industry Overview - The cobalt market is experiencing significant changes due to supply constraints and increasing demand driven by technology sectors such as 3C products and AR glasses. [1][3] Supply and Demand Projections - **Global Supply**: In 2025, global refined cobalt supply is expected to decrease by 11% to 228,000 tons, but is projected to recover to 239,000 tons in 2026. [1][2] - **Global Demand**: Demand for cobalt is anticipated to grow by 9.4% in 2025 to 242,000 tons, reaching 251,000 tons in 2026, although the growth rate is expected to slow. [1][3] - **China's Supply**: China's refined cobalt supply is expected to decrease by 8.6% to 151,800 tons in 2025, with a recovery to 193,500 tons in 2026. [1][4] - **China's Demand**: China's demand for refined cobalt is projected to grow by 20% in 2025 to 193,000 tons, reaching 202,600 tons in 2026, driven by the aging population and health economy. [1][4] Impact of Congo's Export Policies - The Democratic Republic of Congo (DRC) has implemented strict export controls, leading to a 31% decline in global raw material supply in 2025. [5][11] - The DRC's policies have resulted in a significant reduction in imports of wet intermediate products and a notable increase in MHP imports, while imports of products like cobalt tetroxide have decreased. [6][11] - The DRC's export quota for 2026-2027 is limited to 96,600 tons, exacerbating supply constraints. [5][11] Price Trends - Prices for cobalt salts have seen significant increases, with intermediate prices rising by 112% from 2024 to 2025. [9] - Cobalt sulfate prices increased from 29,900 CNY/ton to 55,900 CNY/ton, while cobalt chloride rose from 36,800 CNY/ton to 67,800 CNY/ton. [9] - The price of refined cobalt is expected to reach new highs, with projections of 350,000 to 600,000 CNY/ton. [8] Market Dynamics - The cobalt market is expected to face a supply shortage of approximately 12,000 tons in 2026, with global refined cobalt supply at 249,000 tons and demand at 251,000 tons. [2][12] - MHP projects and recycling materials are anticipated to be the main sources of supply growth, contributing over 20% to the market. [13] Regional Insights - Indonesia's share in raw material supply is expected to increase to around 27% in 2026, with new projects expected to come online. [2][14] - The Chinese market is projected to maintain strong demand, particularly in the battery sector, driven by the growth of 3C products. [4][32] Challenges and Opportunities - The cobalt industry faces challenges from geopolitical risks and policy changes, which may lead to price volatility. [8][11] - Despite the challenges, the demand for cobalt in aerospace and military applications remains stable, providing a buffer against market fluctuations. [8] Conclusion - The cobalt market is navigating a complex landscape of supply constraints, rising demand, and significant price fluctuations, with the DRC's export policies playing a crucial role in shaping future dynamics. [1][5][11]

Core Viewpoint - Huayou Cobalt Co., Ltd. expects significant growth in its 2025 financial performance, with net profit projected to increase substantially compared to the previous year [2][3] Financial Performance Summary - The company anticipates a net profit attributable to shareholders ranging from 585 million to 645 million yuan, representing an increase of 169.5 million to 229.5 million yuan compared to the previous year's reported profit of 415.48 million yuan, which translates to a year-on-year growth of 40.8% to 55.24% [2] - The net profit after excluding non-recurring gains and losses is expected to be between 560 million and 630 million yuan, an increase of 180.49 million to 250.49 million yuan from the previous year's 379.51 million yuan, indicating a year-on-year growth rate of 47.56% to 66% [2] Key Factors for Performance Increase - The significant profit increase is attributed to three main factors: 1. Continuous release of integrated operational advantages, with upstream resource projects achieving production targets and downstream material business recovering growth, enhancing the self-sufficiency rate of MHP raw materials [3] 2. Improved product profitability due to the rebound in prices of cobalt and lithium carbonate, which has effectively expanded the profit margins of related products [3] 3. Ongoing optimization of operational efficiency through management reforms and cost reduction initiatives, leading to improved operational metrics [3]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - In 2026, without the disturbance of Indonesia's nickel ore quota, the nickel surplus is expected to slightly narrow to 245,000 tons, but the refined nickel surplus will increase by another 30,000 tons, intensifying inventory pressure. The surplus is concentrated in low - cost deliverable goods, which may force nickel prices to seek support from the wet - process cost. There are risks such as Indonesia's nickel ore quota policy and the potential change of the Russian nickel inventory status. The trading logic is that there may be a catch - up opportunity in the first half of the year if the macro and industrial factors resonate, but considering the significant annual surplus, short - selling opportunities on rallies can be considered [5][100]. - The recommended trading strategies are a unilateral strategy of rising first and then falling with a higher bottom, and a bull spread strategy for options [6]. Summary by Directory Market Review - In 2025, the nickel price's oscillation center moved down after the trade - war and hit a 5 - year low in December, then rebounded due to Indonesia's policy. The price difference between the highest and lowest points in the year was about 20%, and the volatility significantly narrowed compared to the previous year. Stainless steel prices followed nickel prices but were more rigidly supported by Indonesia's nickel - iron cost, showing a narrow - range oscillation due to weak terminal demand [4][10]. - In the first quarter, the market speculated on Indonesia and the Philippines' nickel ore policies, driving up nickel prices. After the policies were implemented and some restrictions were lifted, the market sentiment eased. After the US announced reciprocal tariffs in early April, nickel prices dropped by over 10%, then recovered. From May, new nickel production capacity was continuously released, but inventory accumulation was slow due to inventory invisibility. In October, nickel inventory started to accumulate rapidly, and in November, short - selling funds entered the market, driving nickel prices to a 5 - year low. In December, Indonesia's plan to tighten the nickel ore quota in 2026 and the overall rise of the non - ferrous metal sector led to a rebound in nickel prices [10][11]. Excess Concentration in Low - Cost Deliverable Goods, Beware of Indonesia's Policy Risk - **Supply Growth Concentrated in Wet - Process Lines, Fire - Process Almost Stagnant** - In 2025, the highest - growth segment in primary nickel supply was Indonesia's NPI production, but due to tightened fire - process smelting in Indonesia and the sluggish stainless - steel market, NPI growth was limited. In 2026, the growth rate is expected to be only 2.4%. Sulfuric - nickel production is expected to grow by 6.7% in 2026, and refined nickel demand, which can be used for perpetual warehouse receipts and has certain financial attributes, is expected to grow by 6.8% in 2026, becoming the highest - growth category [19]. - **Refined Nickel Growth at Home and Abroad**: In 2026, new production capacity in China and Indonesia will be put into operation as planned, with a total of 116,000 tons of new capacity from several companies. Some overseas enterprises will also expand production. In 2025, the estimated refined - nickel production increased by 5.7% to 1.084 million tons, and in 2026, it is expected to increase by 6.8% to 1.157 million tons [20]. - **MHP Capacity Expansion in line with New Energy Trends**: Due to the depletion of high - grade nickel ore reserves and the Indonesian government's preference for wet - process smelting, MHP capacity is expanding. In 2025, Indonesia's estimated MHP production was about 445,000 tons, and in 2026, it is conservatively expected to grow by 28% to 570,000 tons. In contrast, the ice - nickel capacity increase in 2026 is only 83,000 tons. China's sulfuric - nickel production is expected to grow by 12.7% to 400,000 tons in 2026 [28][34]. - **NPI Growth Stagnant**: In 2025, Indonesia's NPI production increased by 22.6% to 1.8602 million tons, but in 2026, it is expected to grow by only 2.4% to around 1.9 million tons. China's NPI capacity has basically reached a low point, and the decline will narrow in 2026. The total NPI production in China and Indonesia is expected to grow by 1.5% to 2.166 million tons in 2026 [37]. - **Indonesia's Nickel Ore Quota Policy Risk Needs Attention** - The supply forecast for 2026 is based on the assumption of sufficient nickel ore. Since 2024, the quarterly nickel ore quota approval has led to tight supply, and the nickel ore price in March is often prone to rise. In 2026, the quota may be set at 250 million tons, which is lower than the 2025 level and the expected demand. However, there is flexibility in the quota adjustment, and if the quota remains at 250 million tons, Indonesia needs to import 70 million tons of nickel ore from the Philippines, which will increase production costs and may support the bottom of nickel prices [48][51]. Demand Hard to Find a Driver, Potential Bright Spots Exist - **Economic Growth Slows, Interest - Rate Cuts Benefit the Non - Ferrous Metal Sector** - In 2025, the global economic growth slowed, and it is expected to further slow to 3.1% in 2026. China's investment and real - estate sectors are weak, and the economy is still at the bottom. Although the Fed will continue to cut interest rates in 2026, which is beneficial for the financial attributes of non - ferrous metals, the overall economic environment has many concerns [61]. - **Stainless - Steel Supply - Demand in Tight Balance, Cost Expected to Rise** - **Stainless - Steel Demand Growth Moderate**: In 2026, China's domestic stainless - steel demand is expected to grow by 4% due to factors such as the real - estate cycle at the bottom and the continuation of consumer subsidies. Exports are expected to decline by 8% due to overseas "double - anti" policies and other factors [66][67]. - **Limited New Stainless - Steel Production Capacity, Output Adjusted by Profit**: In 2026, new stainless - steel production capacity is limited. Nickel and chromium raw material prices may rise due to policy factors, which will increase stainless - steel costs. If demand improves, the price center may move up; otherwise, it will suppress production capacity utilization [70][73]. - **Ternary - Battery Proportion Stabilizes, New Productivity Provides Potential Growth Points** - **New - Energy Vehicle Market Growth Slows**: In the domestic market, the new - energy vehicle subsidy policy in 2026 has both positive and negative effects, and the sales growth rate is expected to reach 16% to 1.78 million vehicles. In the overseas market, the US new - energy vehicle market is weak, while the European market is expected to maintain growth, and the global new - energy passenger - vehicle sales are expected to grow by 14% to 2.41 million vehicles in 2026 [81][86]. - **Ternary - Battery Proportion Drops below 20%, New Productivity as Potential Growth Points**: In the first 11 months of 2025, the proportion of ternary - battery loading in China's power - battery market dropped below 20%. In the future, the ternary - battery market needs high - nickel materials to break through, but it faces technical challenges. It may become a potential growth point from 2027 - 2030 [90][96]. Supply - Demand Balance and Trading Strategy - Macroscopically, the loose monetary environment benefits the financial attributes of non - ferrous metals, but the economic environment has many concerns. Industrially, in 2025, the primary nickel surplus was 277,000 tons, and in 2026, it is expected to narrow to 245,000 tons without the impact of Indonesia's nickel ore quota. The refined - nickel surplus will increase by 30,000 tons, increasing inventory pressure. There are potential short - term upward risks, and there may be a catch - up opportunity in the first half of the year. Considering the annual surplus, short - selling opportunities on rallies can be considered [100].

Report Title - Nanhua Futures' Outlook for Nickel & Stainless Steel in 2026: Adapting to the Supply-Demand Structural Adjustment Cycle [1] Report Industry Investment Rating - Not provided Core Views - In 2025, the nickel market first rose and then declined. The price was mainly influenced by demand fluctuations and sentiment changes, lacking fundamental factors for a trend reversal. The annual price performance was weaker than previous years [2][3]. - In 2026, the focus of the nickel market remains on the progress of supply-demand structural adjustments. The demand for stainless steel is expected to remain stable, while the demand for nickel in the new energy sector is likely to be moderate. The Indonesian government's policies will continue to affect the market, and the supply surplus situation may improve marginally [4][5][6]. - The report predicts that in 2026, the main contract range for nickel will be between 118,000 - 130,000 yuan, and for stainless steel, it will be between 12,100 - 13,000 yuan [6]. Summary by Directory 2025 Annual Market Review - **First Quarter**: The nickel price showed a volatile and upward - trending pattern, with the price center rising to the range of 125,000 - 136,000 yuan/ton. The main influencing factors were Indonesian policy adjustments and the contradiction between short - term cost support and long - term oversupply [9]. - **Second Quarter**: The nickel - stainless steel market showed a volatile and downward - trending pattern. Factors such as the US tariff policy, rising LME nickel inventories, and weak terminal demand led to the decline of nickel and stainless steel prices [11]. - **Third Quarter**: The market showed a range - bound and slightly upward - trending pattern, mainly driven by news and policy expectations. However, high inventories and weak demand restricted the upward space of prices [12]. - **Fourth Quarter**: The market was mainly affected by Indonesian policy disturbances and macro - expectations. Although there were short - term price rebounds, the overall supply surplus situation remained unchanged, and the price fluctuations were mainly due to market sentiment and capital speculation [13]. Industrial Chain Performance Nickel Ore - In 2025, the supply of the nickel ore market was affected by policies and seasons. The supply was tight in the first half of the year and then eased. The demand was mainly suppressed by downstream smelting profits, showing cost - sensitivity characteristics [16][19]. - In 2026, the nickel ore market will be in a cycle of strong policy supervision and rational return of production capacity. The Indonesian government's policies will lead to a certain degree of supply contraction, and the price is expected to remain stable with a slight upward trend [22][23]. Ferronickel - In 2025, the supply of the ferronickel market showed regional differentiation and structural substitution characteristics. The supply was tight in the first half of the year and then increased. The demand was mainly suppressed by the weak profits of downstream stainless steel [25][29]. - In 2026, the ferronickel market will also enter a cycle of policy supervision and rational return of production capacity. The growth rate of effective production capacity is expected to slow down, and the price center will likely be affected by the demand of downstream steel mills [30][31]. Nickel Sulfate and Intermediates - In 2025, the supply of global nickel intermediates was mainly from Indonesia. The production of MHP increased significantly, while the production of nickel sulfate decreased. The demand was affected by the differentiation of technical routes, and the pricing system was adjusted [33][35]. - In 2026, the supply of nickel sulfate intermediates will show a structural increase, while the demand in the Chinese battery sector will slow down. The market may enter a cycle of processing fee control and raw material coefficient game [37][38]. Stainless Steel - In 2025, the supply of stainless steel showed a pattern of marginal slowdown in total growth, internal structural differentiation, and intensified extrusion from overseas capacity. The demand was affected by the weakening of traditional growth engines and the challenges of the external market [42][46][47]. - In 2026, the stainless steel market may enter a cycle of supply - demand re - balance. The supply side will see further elimination of high - cost production capacity, and the demand side may have a marginal improvement, especially in high - end special stainless steel [50][52]. 2026 Annual Balance Deduction - In 2026, the core trading logic of the nickel market will shift to the joint action of supply - demand structural optimization and integrated cost rigid support. The supply surplus situation will be alleviated but not reversed [54]. - The demand for nickel in the stainless steel industry will be the core anchor point. The new energy vehicle battery sector will face pressure from the penetration of lithium iron phosphate, and the nickel market surplus will continue in 2026 [54][55].

1. Report Industry Investment Rating No relevant information provided. 2. Core Views of the Report - In 2026, the fundamental contradictions in the Shanghai nickel market are accumulating, and the volatility is expected to increase. The static reference range is 95,000 - 130,000 yuan/ton. The overall supply - demand surplus pressure persists. The supply side may experience a path switch. The second - phase expansion of low - cost hydrometallurgical production may impact pyrometallurgical processes, and the traditional nickel - to - ferronickel conversion path may face clearance risks. The pricing of various nickel products is expected to gradually converge, with the lower limit anchored to the full cost of hydrometallurgical production. The upward drive depends on Indonesian policy disturbances [2][107]. - Stainless steel has shifted from a situation of strong supply and weak demand to a situation of weak supply and demand. It may tend to fluctuate at the bottom, with limited downward potential. The increase in hydrometallurgical nickel supply may indirectly increase the pressure on pyrometallurgical production but does not directly replace it in the stainless - steel production line. The cost of the pyrometallurgical path is still the bottom - line anchor for stainless steel, with a reasonable safety margin. The upper limit of the price depends on Indonesian and domestic macro - policies, with a static reference range of 12,000 - 13,200 yuan/ton [2][107]. - In terms of strategies, when facing a weak smelting - end fundamental situation and high uncertainty at the mining end, two approaches can be considered: for short - selling, avoid chasing short positions at low prices, consider short - selling at high prices with option protection to avoid extreme Indonesian risk events; for long - buying, dynamically track the cost of hydrometallurgical nickel, including the prices of by - product cobalt and auxiliary sulfur, to find a good safety margin. For stainless steel, the cost still provides support, and the safety margin is better than that of nickel. In 2026, the overall strategy is to try long positions when the price hits the bottom, but avoid over - chasing high prices without clear policy implementation. Also, pay attention to the opportunity of going long on stainless steel and short on nickel when the nickel - to - steel ratio is high, and consider the possibility of periodic domestic - foreign positive/negative arbitrage [3][108]. 3. Summary by Relevant Catalogs 3.1 2025 Review of Nickel and Stainless - Steel Trends: Volatility Narrowed, and the Market Trended Weakly in Fluctuations - In 2025, the overall volatility of nickel and stainless - steel narrowed, and the oscillation center gradually moved downward. From January to March, they trended strongly, with the highest increases approaching 9% and 6% respectively, driven by mining - end rainy seasons, Indonesian quota approvals, and inventory replenishment by major traders. From April to June, they first declined and then rebounded, shifting from fundamental to macro - logical drivers. From July to November, they trended weakly in fluctuations, with the center gradually moving down due to factors such as inventory build - up expectations and weakening demand [5]. 3.2 The Production Cycle Shifts to Hydrometallurgy, Be Wary of Indonesian Mining - End Risks 3.2.1 The Supply of Refined Nickel and Nickel Sulfate Depends on Front - End Smelting - In 2025, the back - end smelting production cycle entered the second half, and the industrial model change led to structural contradictions in supply and demand. The global refined nickel output from January to October increased by 50,000 tons year - on - year to 900,000 tons, with a cumulative year - on - year growth rate of 6%, mainly contributed by China. The global nickel sulfate output from January to October decreased by 10,000 tons year - on - year to 420,000 tons, with a cumulative year - on - year growth rate of - 2%. However, in mid - 2025, China's supply elasticity was released due to a temporary recovery in new - energy demand [9]. - There were structural contradictions in supply and demand. Intermediate products and nickel sulfate were in short supply, while refined nickel inventories increased significantly. The high inventory and selling pressure of refined nickel squeezed the valuation of Shanghai nickel. The tightness of intermediate products was due to the transformation of the industrial model, with resources integrating towards "integrated" or "equity resource + toll - processing" enterprises [10]. - The supply contradiction is concentrated in the front - end, and the increase depends on hydrometallurgical supply. The planned intermediate product projects from 2026 - 2027 may have a total capacity of over 600,000 tons, with hydrometallurgical projects accounting for 87% of the capacity. It is expected that the production of Indonesian MHP in 2025 and 2026 will increase by 130,000 and 160,000 tons year - on - year to 460,000 and 620,000 tons respectively, and the production of Indonesian oxygen - enriched side - blown ferronickel will increase by 20,000 and 30,000 tons year - on - year to 40,000 and 70,000 tons respectively [17][19]. - The competitiveness of RKEF conversion to ferronickel may continue to weaken. In 2025, the volume of converted ferronickel decreased by 100,000 tons year - on - year to 270,000 tons. In 2026, due to the increasing year - on - year growth of MHP and oxygen - enriched side - blown ferronickel, the supply of converted ferronickel may face more severe challenges [25]. 3.2.2 The Incremental Supply of Ferronickel is Limited, but the Stock Elasticity is Still High - In 2025, the supply of Indonesian ferronickel continued to squeeze the Chinese and overseas markets. The global ferronickel output from January to October increased by 150,000 tons year - on - year to 1.84 million tons, with a cumulative year - on - year growth rate of 9%, mainly contributed by Indonesia. The output of Chinese and other overseas regions decreased by 50,000 tons year - on - year to 380,000 tons, with a cumulative year - on - year growth rate of - 10%. The ferronickel market had a certain inventory build - up, but due to cost support, the price decline was limited [28]. - The expected new production in Indonesia is slowing down, and the incremental supply of ferronickel is limited. In 2026, the growth of Indonesian ferronickel production capacity is expected to slow down from 10% to about 5%. It is expected that the global ferronickel supply in 2026 will increase by 60,000 tons year - on - year to 2.26 million tons, with a year - on - year growth rate of about 3%. The strategy for the ferronickel - stainless - steel line is to try long positions when the price hits the bottom, but avoid over - chasing high prices without clear supply disturbances or policy guidance [31]. 3.2.3 The Contradiction in Indonesian Nickel Mines has High Uncertainty - The contradiction at the mining end and the inventory build - up at the smelting end are in a game, and Indonesian policies still have high uncertainty. The pricing of Indonesian pyrometallurgical nickel mines has adopted a "base price + premium" model since 2023. The decline in LME nickel prices has led to a decrease in the base price, but the premium has increased, offsetting the risk of squeezed profits. The total price of Indonesian pyrometallurgical nickel mines increased slightly, which may lead to a 5% increase in the full - cost center of ferronickel produced by Indonesian self - supplied power plants to about $11,000/metal ton [40]. - From the perspective of policy expectations, Indonesia may take appropriate measures to prevent resource over - supply, such as changing the quota approval from three - year to one - year in 2026. However, Indonesia may not want a sharp increase in nickel prices and may prefer to control quotas to prevent over - supply and moderately boost prices [41]. - The cost of Indonesian hydrometallurgical production is rising steadily, and the high cobalt price supports the economic viability of nickel. The price of hydrometallurgical ore is rising moderately, and the increase in the price of auxiliary sulfur has pushed up the MHP cost. However, the increase in the by - product cobalt price can offset part of the cost, so the negative impact on MHP production economics is limited [51]. 3.3 Demand Contradictions may not be Prominent, and Long - Term Potential Lies in Ternary Materials 3.3.1 The Short - Term Growth of Ternary Material Demand is Moderate, and More Long - Term Potential is Expected - The positive and negative impacts of the increase in electric vehicle penetration rate and the decline in the structural proportion of ternary batteries offset each other, resulting in a weak growth pattern for ternary materials. In 2025, the global electric vehicle demand increased by over 20%, while the global ternary battery output increased by only over 10% year - on - year, and the inventory pressure in the industrial chain decreased [53]. - In 2026, the "positive total" and "negative structure" drivers of new - energy demand for nickel will both weaken, but still offset each other to some extent. The global electric vehicle demand growth rate may decline, and the ternary market share may still face pressure. However, the negative impact of inventory reduction on upstream demand is weakening, and the elasticity of demand during seasonal peak replenishment is increasing [53]. - Future potential depends on emerging demands such as solid - state batteries, robots, and low - altitude economy. 2027 may be an important turning point for demand. If the investment in solid - state batteries meets expectations, the ternary material demand may still grow weakly in 2026 but may turn around in 2027 [54]. 3.3.2 The Incremental Demand for Alloys is Limited, and the Raw - Material Structure is Changing - The growth rate of alloy demand is expected to be limited, and attention should be paid to the marginal changes in high - temperature and corrosion - resistant alloys. The overall growth rate of alloy demand has been declining year by year. The demand for corrosion - resistant alloys is under pressure due to factors such as the slowdown in the expansion of LNG receiving stations and the decline in LNG shipping orders. The demand for high - temperature alloys is more resilient, but the orders may be concentrated in leading enterprises [69]. - The price difference between ferronickel and refined nickel may converge in the long run. Some alloy special - steel enterprises may adjust their raw - material structure by using more ferronickel to replace refined nickel, which may intensify the supply - demand mismatch of refined nickel and also provides a new perspective on whether the conversion of ferronickel to ferronickel will be phased out in the long run [70][71]. 3.3.3 The Demand Elasticity of Stainless Steel is Low, and the Supply Rhythm Affects Nickel Consumption - The demand for stainless steel is growing weakly. The demand elasticity is low, and it is difficult to have unexpected performance. From 2020 - 2025, the year - on - year growth rate of apparent demand decreased marginally, mainly affected by factors such as the slowdown in terminal manufacturing investment, the drag of the real - estate post - cycle sector, and overseas trade barriers [89]. - The stainless - steel market has shifted from strong supply and weak demand to weak supply and demand, and the bottom - grinding market may be repeated. In 2025, the stainless - steel market was in a "bottom - seeking" process, and the supply growth rate decreased from over 8% to 3.2%. In 2026, if the stainless - steel market remains undervalued, the excess pressure is unlikely to increase. The strategy for stainless steel in 2026 is to try long positions at low prices, and the upward potential depends on external policy drivers [94][95]. 3.4 Supply - Demand Balance and Outlook 3.4.1 Supply - Demand Balance Sheet - From a static balance perspective, in 2026, the surplus contradiction in the nickel smelting end still exists. The supply side may increase by 80,000 tons year - on - year to 3.86 million tons, and the demand side may increase by 80,000 tons year - on - year to 3.63 million tons, with a surplus of 240,000 tons. The increase in low - cost supply may lower the clearing line for nickel prices, but the upward potential also depends on Indonesian mining - end policies [101]. - Dynamically, there are uncertainties about whether the inventory build - up in 2026 will be as expected, including the impact of Indonesian mining - end policies, the speed of the clearing process, the impact of macro - policies, and the possibility of hidden inventory replenishment [103]. 3.4.2 Conclusion - The fundamental contradictions in the Shanghai nickel market are accumulating, with increased volatility expected in 2026. The static reference range is 95,000 - 130,000 yuan/ton. Stainless steel has shifted to a weak supply - demand pattern, with a static reference range of 12,000 - 13,200 yuan/ton [107]. - The strategies include avoiding short - selling at low prices, considering short - selling at high prices with option protection, dynamically tracking the cost of hydrometallurgical nickel for long - buying, and paying attention to the opportunity of long - stainless steel and short - nickel when the nickel - to - steel ratio is high, as well as periodic domestic - foreign positive/negative arbitrage [108]. - In 2026, the front - end smelting may enter a second peak of low - cost replacement of high - cost production. The pyrometallurgical path still has pressure but also provides a certain safety margin. The static balance is still challenged by Indonesian policies, and the long - term outlook is promising, with 2027 possibly being an important turning point [109][110].

Group 1: Industry Investment Rating - No information provided Group 2: Core Views - No information provided Group 3: Summary by Related Catalogs Indonesia's Nickel - Related Projects - In 2025, several MHP projects are planned or in operation, such as the 2 - capacity Green Eco (IMIP) by GEM, which was put into production in March 2025, and the 6.7 - capacity Blue Flame (WedaBay - IWIP) by Tsingshan + Merdeka, to be put into production in 2025Q4. There are also high - matte nickel projects like the 6 - capacity Zhongqing New Energy Phase II Expansion by Zhongwei from 2025Q1 - Q2 [40]. - For NPI projects in 2025 - 2026, PT Ceria Nugraha Indotama (Ceria) Kolaka has a planned capacity of 5.56 in 2025Q2, and the Dong Kalimantan Steel Phase II was postponed to 2025Q1 with a capacity of 1.9 [43]. - Regarding refined nickel projects in China and Indonesia from 2025 - 2026, China's total capacity is expected to increase from 46.18 in 2024 to 58.58 in 2025 and 67.78 in 2026, while Indonesia's will rise from 10 in 2024 to 13 in 2025 and 19 in 2026 [44]. Nickel Industry Import and Export Data - From January - October 2025, nickel ore imports were 4,682,830.3 tons with a year - on - year increase of 11.8192%, and the annual cumulative imports were 36,885,298.93 tons with a 11.1072% increase. Nickel pig iron imports were 905,144.28 tons with a 31.7213% increase, and the annual cumulative was 9,210,532.888 tons with a 30.6491% increase [64]. - Refined nickel imports were 9,741.246 tons with a 0.594038% increase, and the annual cumulative was 195,124.014 tons with a 178.853% increase. Nickel's wet - process intermediate imports were 151,253.93 tons with a 26.2993% increase, and the annual cumulative was 1,530,353.727 tons with a 29.3579% increase [64]. Market Data and Trends - The LME nickel inventory decreased by 1,818 tons from October to November 2025, with China's inventory decreasing by 1,476 tons, and Australia's by 666 tons [81]. - In terms of the growth rate of the nickel industry's upstream and downstream from 2023 - 2025, MHP had a 70.28% growth in 2023, reaching 310,000 nickel tons in 2024 with a 94% growth, and is expected to reach 440,000 nickel tons in 2025 [97]. - The global nickel supply - demand balance shows a surplus, with the surplus increasing from 17.9 in 2024 to 21 in 2025 and 26 in 2026. The global stainless - steel market also shows a certain supply - demand pattern, with China's apparent consumption of stainless steel increasing from 3,249 in 2024 to 3,370 in 2025 and 3,500 in 2026 [106][107]. Stock Performance - As of December 11, 2025, among downstream stainless - steel related stocks, Taiyuan Iron & Steel Stainless Steel (000825.SZ) had a 30.42% annual increase, while Hals (002615.SZ) had a - 0.26% decrease [129]. - Among upstream and mid - stream nickel - related stocks, Huayou Cobalt (603799.SH) had a 120.69% annual increase, and Hengli Industry (000622.SZ) had a - 92.54% decrease [129].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Nickel ore benchmark prices have slightly declined, but the premium operation has been relatively stable. In the nickel - stainless steel industry chain, the transaction center of nickel - iron prices has moved down, the raw material support has weakened, the weekly inventory of stainless steel has increased, and the market has shown a sluggish performance. In the new energy industry chain, the raw material side is tight, but the output of ternary precursors is expected to decline in December. The inventory pressure of primary nickel is becoming more obvious, with the output of primary nickel increasing month - on - month in December. Referring to the cost support of SMM's integrated MHP production of electrowon nickel at 110,000 yuan/ton, one can consider making low - position layouts and waiting for the realization of positive factors, but should be vigilant against macro - disturbances and overseas industrial policy adjustments [5][6]. 3. Summary According to the Directory 3.1 Price - Monthly decline: Shanghai nickel and LME nickel both fell 3.7%, and most product prices in the industry chain declined. For example, the average price of 8 - 12% high - nickel pig iron (ex - factory price) dropped from 925 yuan/nickel point last month to 883 yuan/nickel point this month, a decrease of 42 yuan/nickel point [8][9]. 3.2 Inventory - Weekly changes: LME inventory decreased by 3,744 tons to 254,760 tons; Shanghai nickel inventory decreased by 239 tons to 33,309 tons; social inventory increased by 3,090 tons to 55,349 tons; and bonded area inventory decreased by 200 tons to 2,200 tons [8][16]. 3.3 Supply - **Nickel ore**: The domestic trade price of 1.2% nickel ore in Indonesia remained at $23/wet ton, and that of 1.6% remained at $52.5/wet ton. The premium of Indonesian nickel ore remained at $25.5/wet ton, and the price of Philippine nickel ore remained at $8.0/wet ton [5][22]. - **Refined nickel**: The output of refined nickel in December is expected to increase by 6.2% month - on - month to 27,400 tons [5][24]. - **Nickel iron**: The purchase price of large nickel - iron plants is 880 yuan/nickel point. Traders' inquiries are relatively active, but factory quotations are scarce. There may be production cuts in December [5][26]. - **Intermediate products**: The weekly average spot prices of MHP and high - grade nickel matte have slightly declined. Recently, some intermediate product projects in an Indonesian park have been affected by tailings dam stacking issues, which are expected to last until the first quarter of next year. SMM expects that the MHP output in December will decrease by about 6,000 nickel tons [5][29]. - **Nickel sulfate**: The economic efficiency of producing nickel sulfate from MHP, nickel beans, and high - grade nickel matte has declined [5][34]. 3.4 Demand - **New energy**: In December 2025, the estimated output of ternary precursors in China is 83,200 tons, a month - on - month decrease of 4.04% and a year - on - year increase of 23.09%. Domestic and export demands have declined, and the output is expected to drop. The weekly output of ternary materials increased by 259 tons to 19,261 tons, and the inventory increased by 71 tons to 19,361 tons. In November, the estimated retail volume of narrow - sense passenger cars is about 2.25 million, flat month - on - month and a year - on - year decrease of 8.7%. Among them, the retail volume of new energy vehicles can reach about 1.35 million, and the penetration rate is expected to reach 60% [6][46]. - **Stainless steel**: Most spot prices of stainless steel have declined this month, and the spot premium has dropped by 85 yuan/ton to 425 yuan/ton. The total social inventory of stainless steel in the mainstream markets across the country, measured by 89 warehouses, is 1.086 million tons, a week - on - week increase of 1.34%. Among them, the inventory of the 300 series has increased by 10,000 tons to 669,000 tons. The estimated crude steel production in November is 3.4551 million tons, a month - on - month decrease of 1.7% and a year - on - year increase of 4.12%. In October, the import of stainless steel increased by 3% month - on - month to 120,000 tons, the export decreased by 14% month - on - month to 358,000 tons, and the net export was 233,000 tons. The positions of raw materials and finished products have fluctuated, and the profit has changed little [6][8]. 3.5 Nickel Supply - Demand Balance - The supply - demand balance of primary nickel and nickel sulfate is presented through relevant charts, but specific numerical analysis is not elaborated in the text [91]. 3.6 Options - Information on historical volatility, historical volatility cones, and the put - call ratios of option trading volume and open interest related to Shanghai nickel is provided [96][101].