The market sentiment was relatively positive last week, with most-traded SHFE nickel contract closing the week at Yuan 121 .390/on Friday (July 11), a weekly increase of 1.23%.
Recently, nickel prices were influenced by macro factors. On July 8, Meidy Katrin Lengkey, Secretary General of the Indonesian Nickel Miners Association (APNI), revealed in an interview with CNBC Indonesia that Indonesia's actual nickel ore output for H1 2025 reached only 120 million tonnes (Q1: 50-65 million tonnes, Q2: 60-65 million tonnes). This contrasted sharply with the approved RKAB (mining quota) volume of 364.1 million tonnes for January-June, approximately triple the actual output. The output shortfall was primarily attributed to rainy season disruptions in key mining areas like Sulawesi.
In addition, influenced by Donald Trump's announcement of proposed 50% tariffs on imported copper effective August 1st, the in LME nickel rebounded, which followed U.S. copper futures upward.
Nickel ore:
The nickel ore market currently operated steadily overall, with prices remaining stable. Recently, due to tight shipping capacity, freight rates increased and were expected to rise further. According to General Administration of Customs of the People's Republic of China (GACC), China's nickel ore imports in May 2025 reached 3.9272 million tonnes, up by 1.0131 million tonnes or 34.77% month-on-month, but down by 681,700 tonnes or 14.79% year-on-year. Of this total, laterite nickel ore accounted for 3.8694 million tonnes and nickel sulfide ore for 57,700 tonnes. Laterite nickel ore imports from the Philippines stood at 3.6058 million tonnes, representing 91.82% of the month's total imports. Total nickel ore imports from January to May 2025 were 10.4345 million tonnes, down 8.00% year-on-year.
Nickel pig iron (NPI):
Although Indonesia announced to approve a nickel ore quota of 364.1 million tonnes, actual mining output in the first half fell short of expectations due to the rainy season. High nickel ore prices drove up nickel pig iron (NPI) production costs in Indonesia. On the supply side, some Indonesian NPI lines shifted to producing nickel matte in July. Combined with partial production halts at Chinese NPI plants due to prolonged losses, NPI production was expected to decline slightly. While the oversupply pressure eased somewhat, the overall surplus structure persisted. On the demand side, end-user demand was sluggish, and social inventories of stainless steel drew down slowly.
According to Mysteel, the combined actual production of nickel pig iron (NPI) in China and Indonesia reached 174,700 tonnes in Ni. content in June 2025, down 3.85% month-on-month but up 22.21% year-on-year. Medium-to-high grade NPI production was 168,100 tonnes, a decrease of 4.01% month-on-month but an increase of 22.62% year-on-year. For the January-June 2025 period, the total production of NPI in China and Indonesia was 1,040,700 tonnes in Ni. content, up 19.31% year-on-year. Within this, medium-to-high grade NPI production accounted for 1,003,600 tonnes in Ni. content, an increase of 20.27% year-on-year.
Nickel sulfate:
Nickel sulfate prices declined last week. Supply saw a marginal increase due to output from new capacity, despite low operating rates at producers constrained by the off-season and squeezed profit margins. On the demand side, weakness persisted. While integrated producers maintained steady orders, downstream buyers showed little willingness to purchase externally, adopting a cautious wait-and-see approach. This lack of consumption growth drivers led to sluggish market activity. Overall, weak supply and demand fundamentals combined to exert downward pressure on prices.
China's nickel sulfate production stood at 182,200 tonnes in June, or 40,100 tonnes in Ni. content, up 1.52% MoM, according to Mysteel survey. The production comprised 0% nickel briquette/powder, 59.78% MHP, 30.94% high-grade nickel matte, and 7.28% secondary nickel by raw material.
Refined nickel:
Refined nickel prices exhibited range-bound movement in June. On the supply side, imported refined nickel replenished the Chinese market, though overall arrivals were limited. Concurrently, primary nickel smelters maintained stable operations with no significant maintenance schedules, ensuring steady supply. In terms of inventory, low stockpiles at major Chinese deliverable warehouses continued and provided some price support. Nevertheless, demand remained weak due to insufficient orders, which kept operating rates low and overall consumption momentum subdued. The market reflected a tight supply-demand balance.
According to Mysteel's survey of 20 sample companies in China, China's refined nickel production in June was 34515 tonnes, a decrease of 4.11% compared to the previous month and an increase of 30.37% year-on-year. From January to June, China's cumulative refined nickel production was 210349 tonnes, an increase of 41.50% year-on-year.
At present, nickel prices rebounded amid the tug-of-war between cost support and supply surplus, with volatility primarily influenced by macroeconomic policies and Indonesian supply regulations. However, against the backdrop of off-season demand coupled with high inventory pressure, it is expected that nickel prices will decline gradually. Market participants were advised to closely monitor the actual implementation of Indonesia's policy and demand changes in the new energy sector during the third quarter. Additionally, inventory fluctuations and import dynamics of refined nickel were also expected to impact price trends in the near term.
Written by Cora Ji, jiruyan@mysteel.com
