From early February to early April, nickel prices generally exhibited a narrow, fluctuating, and converging trend. The nonferrous metals sector faced macroeconomic pressures, while the ample supply of refined nickel remained difficult to change. However, support was found below due to Indonesia's reduction in nickel mining quotas and tight ore supply. Recently, sentiment in the nonferrous metals market has improved, Indonesia proposed revisions to the nickel ore benchmark price, and the impact of Middle East tensions reducing Indonesian HPAL nickel production has become evident, leading to a tendency for nickel prices to break upward.

Nickel Ore Benchmark Price Increase Raises Costs On April 13, 2026, Indonesia's Ministry of Energy and Mineral Resources held a meeting regarding revisions to the Indonesian Nickel Ore Benchmark Price. Key revisions include: 1) Increasing the correction factor for 1.6% grade nickel ore from 17% to 30%, with the factor adjusting by 1% for every 0.1% increase or decrease in nickel grade; 2) Introducing pricing for associated minerals, setting correction factors for cobalt and iron at 30% each, and chromium at 10%; 3) Applying PNBP levies separately for each metal. The revisions, effective from April 15 without retroactivity, significantly raise the HPM compared to before, consequently increasing smelting costs to varying degrees. Separately, on April 9, Indonesia's Energy Ministry stated that approximately 210 million tons of nickel ore mining quotas had been approved this year, with an annual quota target of about 260 million tons.

According to Mysteel, nickel ore offers from the Philippines have softened slightly. The FOB price for 1.3% grade ore is $47-49 per wet ton, with CIF transaction prices at $61 per wet ton. Ocean freight rates have declined slightly compared to March but have not yet returned to pre-US-Iran conflict levels. From January to February this year, the Philippines exported 3.7186 million wet tons of nickel ore, a year-on-year increase of 61.7%. China imported 2.6081 million tons of nickel ore in the first two months, up 26.6% year-on-year. Regarding port inventories, as of April 10, Mysteel data showed nickel ore inventories across 14 Chinese ports at 6.8193 million wet tons, indicating a seasonal decline.

Intermediate Product Output Shrinks According to Mysteel, nickel pig iron production in China and Indonesia totaled 155,300 metric tons in metal content in March, up 6.9% month-on-month. Indonesian production was 132,900 tons, with reduced maintenance impacts; further incremental growth is expected in April. Chinese production also saw a slight increase, with overall output projected to remain stable in April. Total production in China and Indonesia is estimated to increase slightly to 162,000 tons. On imports, China's cumulative nickel iron imports in the first two months reached 1.7415 million tons, down 4.4% year-on-year, with approximately 96.5% originating from Indonesia. For high-grade NPI spot, Indonesian smelters are offering prices around 1,100-1,120 yuan per nickel point, while steel mills' target purchase price is lower, near 1,060 yuan per nickel point, intensifying negotiations between suppliers and buyers and highlighting the economic advantage of stainless steel scrap.

Following the outbreak of the US-Israel-Iran conflict in late February, Indonesian high-pressure acid leach nickel plants, heavily reliant on Middle Eastern sulfur supplies, faced raw material shortage risks. Reports indicate several nickel processing companies have been forced to reduce output by at least 10% since last month. Indonesia's MHP production in March was 32,500 tons in metal content, showing a significant decline compared to January and February. Short-term navigation difficulties in the Strait of Hormuz persist, suggesting the impact of sulfur/sulfuric acid supply shortages on Indonesian hydrometallurgical output will continue. Additionally, due to the reduced nickel mining quota itself, Indonesia's nickel processing capacity utilization rate may decline from last year's high levels.

Ample Refined Nickel Supply Persists Mysteel reported domestic refined nickel production in March was 37,337 tons, rebounding 14.5% month-on-month and increasing slightly by 1.8% year-on-year, as major producers resumed output and new refined nickel production lines in Zhoushan began contributing volume. Further incremental growth is anticipated in April. Indonesian refined nickel production in March was 9,500 tons, slightly down from February, with an expected recovery to 9,800 tons in April.

Refined nickel inventories remain high. The latest total nickel inventories on the SHFE stand at 66,042 tons, with registered warrant volumes at 63,896 tons, still showing an upward trend without signs of reversal. Spot premiums have declined; traders hold ample supplies facing sales pressure, while downstream demand lags relatively, resulting in subdued purchasing sentiment. LME nickel inventories saw a slight decrease after March but remain at an absolute high level overall, with the latest total at 278,000 tons and registered warrants at 265,000 tons. The 0-3 month cash discount persists above $200 per ton.

Demand Largely Stable Firstly, for stainless steel, Mysteel data shows China's 300-series stainless steel crude steel production in March was 1.937 million tons, a significant increase of 46.8% month-on-month and a slight 1.8% rise year-on-year, influenced by post-holiday production resumption. April's production schedule is expected to be similar to March's output. Since March, social inventories of stainless steel have gradually declined. As of this week, 300-series stainless steel social inventories stood at 676,200 tons, lower than the levels seen in the same period over the previous three years, indicating manageable inventory pressure. However, as stainless steel prices rise, downstream reluctance to buy at higher prices is increasing.

In the new energy sector, battery-grade nickel sulfate prices experienced a slight decline after mid-March but have recently seen some upward movement in offers supported by cost factors. Downstream demand remains unclear, with no significant increase in acceptance of nickel salt prices yet. On the end-user front, China's new energy vehicle production and sales in March reached 1.231 million and 1.252 million units respectively. Production decreased by 3.6% year-on-year, while sales increased by 1.2% year-on-year. The weak growth in NEV production and sales in the first quarter is attributed partly to the high base from last year and the adjustment of the NEV purchase tax from "exemption" to "halved" this year. Ternary battery installations in March were 10,700 MWh, up 7% year-on-year.

Summary Overall, in the external environment, markets are gradually becoming desensitized to the conflict, and sentiment in nonferrous metals is improving, though risks from extreme events still require vigilance. Indonesia's reduction in nickel mining quotas and adjustment of the nickel ore benchmark price provide supportive factors for nickel prices. High-grade NPI production in China and Indonesia remains generally stable with slight growth, but Indonesian nickel intermediate product supply is expected to shrink further due to sulfuric acid shortages. However, refined nickel production continues to grow, inventories remain high, and the ample supply situation is difficult to alter. Downstream demand from stainless steel and ternary batteries remains relatively subdued without significant bright spots. The narrative of nickel market surplus has persisted for some time. With increasing marginal improvements upstream and the recovery in nonferrous metals sentiment, we believe the short-term price center for nickel may gradually shift upward. This analysis is for reference only.