This week, nickel prices first fell and then rose, moving sideways amid a tug-of-war between macro fluctuations and supply-side policy. Early in the week, affected by a stronger US dollar and risk-off sentiment across global commodities, LME nickel once fell below the key $17,000 level. It then rebounded on easing tensions in the Middle East and policy expectations that Indonesia planned to impose a nickel export tax. As of Friday's close, the weekly price of the most-traded SHFE nickel contract rose 3%, while the LME nickel 3M contract gained 2.4% WoW. In the spot market, the average SMM price of #1 refined nickel was 138,030 yuan/mt this week, up 1,100 yuan/mt WoW. The average Jinchuan nickel premium was 5,900 yuan/mt this week, down 1,600 yuan/mt WoW. Premiums for mainstream electrodeposited nickel brands in China ranged from -600-400 yuan/mt. Nickel plate premiums fell notably this week, and sluggish demand led to poor trading in the spot market. On the macro front, geopolitical risks continued to weigh on market risk appetite this week. According to US media reports, the US Department of Defense was formulating a "decisive lethal strike" military plan against Iran, which could include the deployment of ground forces and large-scale airstrikes. Although news of a ceasefire window had emerged earlier, risk-off sentiment did not truly fade. China's macro policy maintained a positive tone, and the pro-growth signals released at the Boao Forum boosted market confidence. Inventory side, Shanghai Bonded Zone inventory was about 1,700 mt this week, with destocking of 500 mt WoW. China's social inventory was about 90,000 mt, with an inventory buildup of about 1,300 mt WoW. Nickel prices are expected to remain in a tug-of-war between "strong cost support" and "weak actual demand" in the short term. The core trading range of the most-traded SHFE nickel contract is expected at 133,000-143,000 yuan/mt. Cost-floor support provided by Indonesian policy remains solid, but macro pressure and weak demand will limit upside room.

Nickel prices came under pressure and pulled back this week. Early in the week, rumors of tighter approvals for RKAB on the Indonesian ore side spurred the futures market to rally briefly, but it later retreated as US Fed officials repeatedly delivered hawkish remarks, the US dollar index held above 106, and global risk assets came under broad pressure. With tensions in the Middle East rising, macro risk-off sentiment strengthened, and nickel prices on SHFE and LME corrected notably. The most-traded SHFE nickel contract closed at 137,140 yuan/mt on Friday, down 1.6% on the week. The LME nickel 3M contract fluctuated between $17,000-17,900/mt this week, with a weekly decline of 2%. In the spot market, the weekly average price of SMM #1 refined nickel was 140,600 yuan/mt, down 2,150 yuan/mt WoW. The weekly average Jinchuan nickel premium was 6,900 yuan/mt, down 1,100 yuan/mt versus the week before Chinese New Year. Premiums for mainstream domestic brands of electrodeposited nickel ranged from -400-400 yuan/mt. After nickel prices fell this week, downstream restocking driven by rigid demand became more evident, and overall spot nickel plate shipments increased WoW. On the macro front, US ADP employment in February increased by 63,000, the largest rise since November 2025 and above the market expectation of 50,000, weakening expectations for US Fed interest rate cuts. Meanwhile, US January PCE and core PCE inflation data rose above expectations, and the US dollar index rebounded, creating short-term pressure on base metal prices. Geopolitical tensions continued to escalate this week, with Iran announcing the closure of the Strait of Hormuz, posing a potential threat to the sulfur supply chain. Domestically, the Two Sessions emphasized medium and long-term benefits from national defense spending, improving expectations for alloy demand in sectors such as defense industry and shipbuilding, which supported nickel alloy consumption. Inventory: Shanghai Bonded Zone inventory was about 2,200 mt this week, flat WoW. Domestic social inventory was about 85,000 mt, with an inventory buildup of about 8,000 mt WoW. Nickel prices are currently in a stalemate, with firmer cost support but unchanged near-term pressure. Tighter Indonesian RKAB quotas and tight nickel ore supply provided strong support for nickel prices, but levels above 140,000 yuan/mt faced strong resistance from high inventory and weak demand. The core expected trading range for the most-traded SHFE nickel contract next week is 130,000-140,000 yuan/mt.

Recently, Shaanxi Jutai New Materials Technology Co., Ltd. announced that its 30,000 mt annual nickel plate production line located at the Zhoushan base in Zhejiang has entered the final commissioning phase and will officially commence production in March 2026. It is understood that the nickel plate project to be launched mainly produces high-purity electrodeposited nickel plates, which will be widely used in the manufacturing fields of alloys and electroplating.

This week, the average price of SMM 8-12% high-grade NPI was 942.3 yuan/mtu (ex-factory price, tax included), up 12.3 yuan/mtu MoM. However, the overall market price of high-grade NPI showed a weakening trend this week.

This week, the average price of SMM 8-12% high-grade NPI was 954.6 yuan/mtu (ex-factory, tax included), marking a 1.3 yuan/mtu increase WoW. However, the overall price performance of high-grade NPI remained under pressure this week.

This week, the average price of SMM 8-12% high-nickel pig iron (NPI) stood at 967.5 yuan per nickel unit (including tax, ex-factory), marking a decrease of 7.2 yuan per nickel unit compared to last week's average. Although the price of high-nickel pig iron continues to trend downward, the rate of decline has slowed compared to the previous week.

[SMM Analysis: Costs and Prices of 304 Stainless Steel Cold-Rolled Coils Rise Simultaneously, Losses Narrow but Challenges Persist] This week (March 3-7, 2025), the cash cost of 304 stainless steel cold-rolled coils fluctuated between 13,899.56-14,007.17 yuan/mt, while the full cost ranged from 14,519.56-14,627.17 yuan/mt. Although market prices increased during the same period, profit values remained negative, with profit margins at the cash cost side ranging from -5.79% to -5.05% and at the full cost side from -9.79% to -9.07%. In terms of cost composition, nickel raw materials and high-carbon ferrochrome costs showed varying degrees of change. Overall, the costs of 304 stainless steel cold-rolled coils remained high during this period, with significant losses evident.

[2.24 Morning Meeting Summary] At the beginning of the week, due to the decline in LME nickel prices, the costs for nickel salt smelters decreased, leading to slight price concessions. However, by the end of the week, with the rebound in LME nickel prices and the impact of the DRC's suspension of cobalt exports, the coefficient of cobalt in MHP increased, resulting in rising cost pressure for nickel salt smelters. This strengthened their sentiment to stand firm on quotes, and prices rebounded accordingly.

[SMM Analysis: Stainless Steel Futures Fluctuate, Spot Transactions Mediocre, 304 Cold-Rolled Costs and Profits Under Pressure] This week, the price of the stainless steel 2505 futures contract showed a fluctuating trend. Data on the costs, prices, and profit margins of 304 stainless steel cold-rolled coils indicated a continuous decline in both costs and prices, leading to compressed profit margins. The market's supply-demand imbalance is prominent, with weak demand and relatively sufficient supply. In the short term, the stainless steel market is likely to maintain the current pattern, posing challenges to corporate profitability.

[SMM Analysis: High Raw Material Prices Compress Profits, Stainless Steel Costs and Profits Continue to Compete] This week, the stainless steel market saw increased activity, with electronic trading showing steady improvement and spot prices rising slightly. The trading atmosphere downstream has warmed up. Raw material prices have a significant impact on costs, with costs and profits being inversely correlated. On February 21, the cost of 304/2B products exceeded the selling price, resulting in losses. Fluctuations in raw material prices determine profit margins. Looking ahead to next week, stainless steel finished product prices are expected to remain steady or rise slightly, with the market gradually releasing volume. However, limited improvement in demand and oversupply continue to suppress price increases.