The nickel market saw a stair-step downward price shift in September, caught in the tug-of-war between macro monetary expectations and fundamental supply-demand adjustments.
In mid-to-late September, renewed hawkish Fed rate hike expectations, coupled with stainless steel production cuts and weaker downstream demand, dragged nickel feedstock prices lower. Nickel price fell toward CNY 125,470/tonne.
Sulphur prices remained relatively resilient around US $1,000/tonne. Persistent margin compression from low cobalt discounts may trigger further MHP (Mixed Hydroxide Precipitate) supply contraction, with the MHP nickel coefficient falling to 88%. The MHP market stays in surplus for Q4.
With lower nickel prices and pure nickel output curtailment weighing on MHP, the MHP nickel coefficient is expected to decline further to 85–87%, pulling nickel sulfate prices down. Concentrated downstream buyers hold bearish cost views and pushed nickel sulfate prices lower in advance, with nickel sulfate trading within CNY 25,600–27,600/tonne.
For October, Fed hike expectations cooled sharply. Nickel fundamentals remain weak, yet the market prices in potential production cuts amid industry losses. Nickel will stay bearish, but monthly losses will narrow. The supply-demand imbalance is not severe, and macro pressure eases. A breakout from the downtrend is unlikely; price center is projected near CNY 118,000/tonne.
