Core Outlook: Consolidating

Nickel prices are strengthening, and market sentiment is warming. Prices have completed a round of valuation recovery from recent lows, returning to relatively reasonable levels. Supply-side expectations form the core support for nickel price strength. Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has reiterated that there will be no large-scale increases in supplementary RKAB quotas. As the July 31 application deadline approaches, market expectations of tight nickel ore supply are intensifying. Additionally, last week's gains may partially reflect potential disruptions to sulfur supply from escalating Middle East conflicts. The pace of domestic refined nickel destocking is generally slow, but the market is more focused on future changes in the supply-demand structure than on absolute inventory levels. Current market sentiment is cautiously bullish, but short-term upward movement remains expectation-driven, awaiting clearer signals from the industrial side.

Nickel Ore Price: Bearish

As of July 24, Philippine Ni0.9% and Ni1.5% laterite nickel ore CIF prices were down by $0.5 and unchanged, respectively, at $32 and $64.5 per wet metric ton week-on-week. Domestic nickel ore in Indonesia: as of July 24, Ni1.2% and Ni1.6% domestic nickel ore delivery prices were down by $0.5 and unchanged, respectively, at $29 and $66.1 per wet metric ton week-on-week. Sulfur Price: Neutral, Indonesia sulfur CIF price was flat week-on-week at $1,150 per ton as of July 24.

MHP Production: Bearish

As of June 2026, Indonesian MHP production increased by 0.15kt to 29.9kt month-on-month, a 5.28% increase. High-grade Nickel Matte Production: Bullish, Indonesian high-grade nickel matte production decreased by 1.2kt to 28.7kt month-on-month, a 4.01% decline.

Refined Nickel Production: Neutral

As of June 2026, China's monthly refined nickel production increased by 200 tons to 33.8kt month-on-month, a 0.6% increase, and a 6.29% year-on-year increase. Refined Nickel Inventory (SMM): Bearish, as of July 24, pure nickel social inventory (including SHFE) increased by 1,794 tons to 129.8kt, a 1.40% increase.

Domestic NPI Price: Neutral

As of July 24, the average price of 8-12% high-grade nickel pig iron was up by RMB 0.5 per nickel point to RMB 1,123.5 per nickel point week-on-week. Nickel Pig Iron Production: Bullish, Indonesian NPI production decreased by 1.6kt to 127.5kt of nickel metal month-on-month, a 1.24% decline.

Stainless Steel Production Schedule: Bearish

As of July 2026, China's estimated crude stainless steel production schedule is 3.5999 million tons, up 2.4% month-on-month and 12.12% year-on-year. Stainless Steel Social Inventory: Bearish, as of July 24, stainless steel social inventory increased by 10.1kt to 1.099 million tons week-on-week, a 0.93% increase.

Stainless Steel Cost: Bullish

As of July 24, China's 304 cold-rolled stainless steel production cost increased by RMB 19 per ton to RMB 14,394 per ton week-on-week, a 0.13% increase.

Balance & Outlook

Last week's summary: In the mining sector, weather in major Philippine mining areas was stable, with production and port shipments operating normally. On the demand side, domestic nickel ore port inventories were high, and downstream procurement focused on medium-to-high-grade ore with Ni1.4% grade and above. In Indonesia, ore prices were impacted by the downward adjustment of the HMA benchmark price, causing transaction prices to move lower. However, considering the strong constraints on this year's total RKAB quota, traders held a wait-and-see attitude, with low willingness to sell at low prices. For nickel pig iron, NPI prices remained high overall, with ongoing supply-demand negotiations. Downstream stainless steel mills continued to pressure prices. Spot circulating supply was tight, and market transactions were dominated by long-term contract orders. The cost-effectiveness of scrap stainless steel recycling continued to increase, diverting some NPI procurement demand. For nickel sulfate, downstream seasonal weakness was evident, with precursor companies only planning minor replenishment purchases at the end of the month, with no large-scale stocking plans. However, the tight supply of intermediate products remained unchanged, with some salt plants expecting production cuts. Facing rising nickel prices, producers were inclined to maintain firm pricing. On the demand side, the stainless steel operating logic still revolves around the tug-of-war between strong costs and weak demand. Steel mills had a clear attitude of maintaining firm prices, and price fluctuations remained relatively limited. Overall, nickel prices strengthened, and market sentiment warmed. Prices have completed a round of valuation recovery from recent lows, returning to relatively reasonable levels. Supply-side expectations form the core support for nickel price strength. Indonesia's ESDM reiterated that there will be no large-scale increases in supplementary RKAB quotas. As the July 31 application deadline approaches, market expectations of tight nickel ore supply are intensifying. Additionally, last week's gains may partially reflect potential disruptions to sulfur supply from escalating Middle East conflicts. The pace of domestic refined nickel destocking is generally slow, but the market is more focused on future changes in the supply-demand structure than on absolute inventory levels. Current market sentiment is cautiously bullish, but short-term upward movement remains expectation-driven, awaiting clearer signals from the industrial side. Nickel prices are testing higher levels with a volatile trend.

Industry News Update

The Indonesian Nickel Miners Association (APNI) recorded that from January to June 2026, nickel ore consumption reached 120.6 million tons, equivalent to 46.2% of the 2026 Work Plan and Budget (RKAB) production quota of 260-270 million tons. APNI Secretary General Meidy noted that there are currently 422 active nickel mining business permits (IUP), supplying 79 nickel processing and refining facilities or smelters. Indonesian President Prabowo confirmed that the strategic commodity one-stop export policy will be fully implemented on September 1, 2026. PT DSI began operations on July 1, aiming to improve export governance, block under-invoicing loopholes, and track foreign exchange repatriation. Data shows that DSI managed over USD 10.5 billion in foreign exchange in its initial operations, significantly narrowing the price gap between domestic and international markets from 30-45%. The Indonesian Ministry of Finance recently issued Decree No. 32/MK/BC/2026, imposing export restrictions on strategic natural resource commodities of the ferroalloy category. The new regulations target products under HS Code Ex.7202.60.00, including ferronickel with nickel content ≥8%, sponge ferronickel and granular ferronickel with nickel content ≥4%, and low-grade ferronickel products with nickel content 2%≤Ni<4% and iron content ≥75%. Exports require a Surveyor Report and relevant export permits. From January 1, 2027, these ferroalloy commodities can only be exported by state-owned export enterprises (BUMN Ekspor) or with a letter of confirmation from the Ministry of Trade. Indonesia’s Eramet revealed that PT Weda Bay Nickel (WBN) is continuously liaising and cooperating with Indonesia's ESDM, following the ministry's guidance to advance the adjustment process for its 2026 Work Plan and Budget (RKAB) production quota. WBN's annual nickel ore mining capacity can reach 60 million tons. If the new RKAB is approved between July and September, the company has the production capacity to output 42 million tons of nickel ore this year. If PT WBN's application for an increase in its 2026 RKAB quota is not approved, nickel smelters in the IWIP industrial park will face a raw material gap of approximately 30 million tons of nickel ore. On June 30, 2026, Indonesia's ESDM did not announce the official figure for the total increase in the 2026 nickel ore RKAB quota at the relevant meeting. The basic quota remains at 260 million wet tons, and the new supplementary quota awaits ESDM's approval and announcement. The approval rules mentioned at the meeting are as follows: 1. Application window for mine supplementary quotas: Supplementary production increase applications can only be submitted from July 1 to July 31; 2. Approval constraints: New quotas must be tied to domestic Indonesian-owned smelting capacity. Applications for production increases from pure mining companies are likely to be rejected, and capacity from mines focused on external raw material sales will not be released.

Sharp Rise in Market Prices

Last week, the main SHFE nickel contract for delivery in September 2026 opened at RMB 128,890 per ton and closed at RMB 133,710 per ton. The weekly high was RMB 134,350 per ton, and the low was RMB 128,850 per ton, resulting in a weekly gain of 3.74%. Spot Premiums Decreased: as of July 24, the spot price of electrolytic nickel was up by RMB 2,250 per ton to RMB 132,350 per ton week-on-week, a 1.73% increase. As of July 24, the Jinchuan nickel price was up by RMB 2,150 per ton to RMB 133,200 per ton week-on-week, a 1.64% increase. The Jinchuan nickel premium decreased by RMB 300 to RMB 1,450 per ton. As of July 24, the imported nickel price was up by RMB 2,450 per ton to RMB 131,700 per ton week-on-week, a 1.90% increase. The imported nickel premium was flat week-on-week at RMB -50 per ton. Import Window Closed: as of July 24, the LME nickel price was up by USD 265 per ton to USD 17,310 per ton week-on-week, a 1.55% increase. The LME nickel 0-3 cash discount narrowed by USD 0.47 per ton to USD -194.56 per ton. As of July 24, the electrolytic nickel import profit/loss decreased by RMB 385.76 per ton to RMB -62.72 per ton, while the export profit/loss increased by USD 32.49 per ton to USD -355.85 per ton.

Nickel Pig Iron Prices Remain Firm

As of July 24, the average price of 8-12% high-grade nickel pig iron was up by RMB 0.5 per nickel point to RMB 1,123.5 per nickel point week-on-week. The premium of high-grade NPI over electrolytic nickel decreased by RMB 24.5 per nickel point to RMB -189.5 per nickel point. As of July 24, the average price of battery-grade nickel sulfate was up by RMB 195 per ton to RMB 31,600 per ton week-on-week, while the average price of electroplating-grade nickel sulfate was flat at RMB 34,250 per ton. The premium of battery-grade nickel sulfate over first-grade nickel plate decreased by RMB 1,563.64 per ton to RMB 11,936.36 per ton.

Nickel Ore: Prices Under Pressure to Adjust

Ore Prices Weak: as of July 24, Philippine Ni0.9% and Ni1.5% laterite nickel ore CIF prices were down by $0.5 and unchanged, respectively, at $32 and $64.5 per wet metric ton week-on-week. Weather in major Philippine mining areas was stable, with production and port shipments normal, showing an increasing supply trend. Demand for high-grade ore was relatively stable, with downstream procurement focusing on medium-to-high-grade ore with Ni1.4% grade and above. As of July 24, Indonesian Ni1.2% and Ni1.6% domestic nickel ore delivery prices were down by $0.5 and unchanged, respectively, at $29 and $66.1 per wet metric ton week-on-week. Indonesian ore prices maintained a weak trend in the short term, with attention on the approval pace of supplementary RKAB. Port Inventories Increased: as of July 24, nickel ore port inventories increased by 0.43 million wet tons to 7.38 million wet tons week-on-week, a 6.19% increase. According to customs data, China's nickel ore imports in June 2026 were 5.861 million tons, down 1.64% month-on-month, but up 34.84% year-on-year. Imports from the Philippines accounted for 5.4472 million tons, or 92.94% of the monthly total. As of June 2026, cumulative nickel ore imports were 19.7241 million tons, a cumulative increase of 33.44%. Intermediate Product Imports Declined: as of July 24, the MHP discount coefficient to LME decreased by 0.005 percentage points to 91.5% week-on-week, while the high-grade nickel matte discount coefficient to LME was flat at 93.5%. According to SMM data, as of June 2026, Indonesian MHP production increased by 1.5kt to 29.9kt month-on-month, a 5.28% increase. Indonesian high-grade nickel matte production decreased by 1.2kt to 28.7kt month-on-month, a 4.01% decline. As of June 2026, MHP monthly imports were 104.2kt, down 17.80% month-on-month and 18.73% year-on-year. Cumulative MHP imports from January to June 2026 were 853.8kt, down 1.08% year-on-year. As of June 2026, high-grade nickel matte monthly imports were 33.6kt, down 23.71% month-on-month but up 49.40% year-on-year. Cumulative high-grade nickel matte imports from January to June 2026 were 333.1kt, a cumulative increase of 53.38%.

Refined Nickel: Unabated Supply Pressure

Refined Nickel: Net Imports Decrease. As of June 2026, China's monthly refined nickel production increased by 200 tons to 33.8kt month-on-month, a 0.6% increase, and a 6.29% year-on-year increase. As of June 2026, China's refined nickel monthly imports were 25.7kt, down 14.7% month-on-month but up 51.0% year-on-year. Cumulative refined nickel imports from January to June 2026 were 149.5kt, a cumulative increase of 54.24%. As of June 2026, China's refined nickel monthly exports were 1,811 tons, up 175.23% month-on-month but down 82.15% year-on-year. Cumulative refined nickel exports from January to June 2026 were 12.1kt, a cumulative decrease of 86.82%. Refined Nickel: High Inventory Levels. As of July 24, SHFE nickel warrants increased by 467 tons to 99.8kt week-on-week, a 0.47% increase. LME nickel warrants decreased by 5,880 tons to 277.3kt. As of July 24, pure nickel social inventory (including SHFE) increased by 1,794 tons to 129.8kt, a 1.40% increase. Among this, East China social inventory increased by 1,877 tons to 19.7kt, while Shanghai bonded zone inventory was flat at 1.7kt. Refined Nickel: Strong Cost Support. As of July 24, the Indonesia sulfur CIF price was flat week-on-week at $1,150 per ton.

Nickel Sulfate: Weak Seasonal Demand

Nickel Sulfate: Imports Increase. As of June 2026, China's monthly nickel sulfate production increased by 126 tons to 36.5kt of metal tons month-on-month, a 0.35% increase. As of June 2026, China's monthly nickel sulfate imports were 29.8kt (physical tons), up 56.8% month-on-month and 124.7% year-on-year. Of this, 16,300 tons came from Indonesia, 4,236 tons from South Korea, and 6,087 tons from Finland. Cumulative nickel sulfate imports from January to June 2026 were 165.2kt, a cumulative increase of 46.3%. Nickel Sulfate: Spot Costs Recover. On the cost side, nickel prices strengthened, causing spot costs for nickel sulfate production to recover. The tight supply of intermediate products remained unchanged, with MHP coefficients and auxiliary material prices like sulfuric acid still high, leading some salt plants to maintain firm pricing intentions. Nickel Sulfate: Demand Weakens. As of June 2026, monthly production of NCM precursors decreased by 2,420 tons to 94kt, a 2.51% month-on-month decline. On the demand side, due to a significant drop in nickel prices compared to the previous month and some inventory accumulation among downstream enterprises, the willingness to build inventory was weak, with relatively low acceptance of nickel salt prices.

Nickel Pig Iron: Prices Firm at High Levels

Nickel Pig Iron: Supply Decreases. As of June 2026, China's nickel pig iron production (metal content) increased by 760 tons to 30.3kt of nickel metal month-on-month, a 2.58% increase. As of June 2026, Indonesian NPI production decreased by 1.6kt to 127.5kt of nickel metal month-on-month, a 1.24% decline. According to customs data, as of June 2026, China's monthly nickel pig iron imports were 756kt (equivalent to 88.8kt of nickel metal), down 16.9% month-on-month and 27.4% year-on-year. Total nickel pig iron imports from January to June 2026 were 5.081 million tons, down 8.6% year-on-year. Imports from Indonesia accounted for 4.90 million tons, down 9.6% year-on-year. Nickel Pig Iron: Spot Profits Increase. As of July 24, NPI production costs in Indonesia's Konawe, Morowali, and other regions increased by RMB 11, RMB 20, and RMB 12 per nickel point week-on-week to RMB 1,056, RMB 965, and RMB 1,070 per nickel point, respectively. Domestic smelter production costs decreased, primarily due to the downward adjustment of Philippine nickel ore prices.

Stainless Steel: Continuing Adjustment

Stainless Steel: Fluctuating Market. Last week, the main stainless steel contract opened at RMB 14,645 per ton and closed at RMB 14,770 per ton. The weekly high was RMB 14,900 per ton, and the low was RMB 14,595 per ton, resulting in a weekly gain of 0.82%. As of July 24, the 304/2B coil (mill edge) Wuxi quotation was up by RMB 25 per ton to RMB 15,050 per ton, a 0.17% increase. Stainless Steel: Ample Supply Maintained. According to Mysteel, China's stainless steel crude steel production in June 2026 was 3.5154 million tons, down 7.88% month-on-month but up 6.8% year-on-year. The estimated crude steel production schedule for July is 3.5999 million tons, up 2.4% month-on-month and 12.12% year-on-year. Breakdown: 200 series: 1.0417 million tons, up 18.38% month-on-month and 10.7% year-on-year; 300 series: 1.8618 million tons, down 5.79% month-on-month but up 9.64% year-on-year; 400 series: 696.4kt, up 5.64% month-on-month and 21.81% year-on-year. As of June 2026, China's stainless steel imports were 120.2kt, up 31.92% month-on-month and 9.81% year-on-year. China's stainless steel exports were 446.2kt, up 7.36% month-on-month and 14.44% year-on-year. Stainless Steel: High Inventory Levels. As of July 24, stainless steel social inventory increased by 10.1kt to 1.099 million tons week-on-week, a 0.93% increase. Among this, 300 series inventory increased by 3,821 tons to 672kt, a 0.57% increase. As of July 24, stainless steel warrants increased by 1,386 tons to 90.7kt week-on-week, a 1.55% increase. Stainless Steel: Stable Cost Support. As of July 24, China's 304 cold-rolled stainless steel production cost increased by RMB 19 per ton to RMB 14,394 per ton week-on-week, a 0.13% increase.