While upstream MHP payables stayed high, auxiliary material prices such as sulphur and sulphuric acid continued to climb, and downstream ternary production schedules remained at high levels, the performance of battery-grade nickel sulphate prices was not optimistic. SMM believes this was driven by multiple factors, including weakening cost support, front-loaded downstream stockpiling, increased import supplementation, and higher volumes of nickel sulphate converted from refined nickel.

Indonesia’s Ministry of Energy and Mineral Resources (ESDM) revised the HPM nickel ore formula in Quarter 2 of 2026, significantly raising the adjustment factor and including cobalt, iron, and chromium in pricing for the first time. This shift will increase base prices across all grades, particularly for low-grade ores used in hydrometallurgy, placing heavy cost pressure on the stainless steel and new energy industries. Supply remains tight due to delayed mining quota approvals and rising refining costs. Following the policy signal, international nickel futures have surged through key resistance levels. Analysts suggest that high raw material costs may become the new norm, with potential for further price hikes if refined nickel output drops or policy impacts exceed market expectations.

During the night session on January 6, 2026, multiple SHFE nickel contracts hit limit-up, with the most-traded SHFE nickel contract (2602) closing up at 147,720 yuan/mt, while the LME nickel 3M contract rose to an intraday high of $18,785/mt. Recent sudden changes in U.S.-Venezuela relations have sparked concerns about the stability of global resource supply, driving significant gains in safe-haven precious metals such as gold and silver, with market sentiment quickly spreading to the nonferrous metals sector. Against the backdrop of earlier expectations for supply tightening policies in Indonesia and the sentiment-driven rally in nonferrous metals, speculative funds flooded into nickel futures contracts, pushing the weighted open interest for SHFE nickel above 370,000 lots. Spot side, on January 7, the price for SMM #1 refined nickel ranged from 144,300 to 156,000 yuan/mt, with an average price of 150,150 yuan/mt, up 6,700 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel was 8,500-10,000 yuan/mt, with an average premium of 9,250 yuan/mt, up 500 yuan/mt from the previous trading day. The spot premiums and discounts quotation range for mainstream domestic brands of electrodeposited nickel was -200 to 300 yuan/mt. However, actual spot transaction activity remained weak, as high nickel prices posed significant challenges for downstream users, whose acceptance of high-priced nickel plates was limited. Inventory side, the latest LME nickel inventory stood at 255,000 mt, while SMM's social inventory of refined nickel was approximately 59,000 mt, with inventories continuing to build recently. Against the backdrop of the sharp rise in nickel prices, smelters showed strong willingness to increase production; SMM refined nickel output in December increased by 22% MoM and is expected to rise by another 18% MoM in January. With no improvement in downstream demand, there is potential for significant inventory buildup ahead. In the short term, close attention should be paid to the actual implementation of Indonesia's quota approvals. The battle between "expectations of tightening" and "actual surplus" in nickel prices is set to intensify.

During the night session on January 6, 2026, multiple SHFE nickel contracts surged by their daily limit, with the most-traded SHFE nickel contract (2602) closing up at 147,720 yuan/mt, while the LME nickel 3M contract reached an intraday high of $18,785/mt. The sharp rise in nickel prices resulted from a combination of factors, including expectations of supply tightening policies in Indonesia, geopolitical risks arising from US military actions against Venezuela, and macro fund inflows. Speculative capital flooded into nickel futures contracts, driving the weighted open interest of SHFE nickel above 370,000 lots. However, the fundamental outlook for nickel has not completely reversed. Spot transaction activity remains weak, with downstream users showing limited acceptance of high-priced nickel plates. The latest LME inventory stood at 255,000 mt, while SMM's social inventory of refined nickel was approximately 59,000 mt, indicating a slight inventory buildup. Moreover, against the backdrop of soaring nickel prices, smelters have shown strong willingness to increase production. SMM refined nickel output rose 22% MoM in December and is expected to increase another 18% MoM in January. With no improvement in downstream demand, there is a possibility of significant inventory accumulation in the future, intensifying the battle between "expectations of tightening" and "actual surplus."

SMM's monthly metal production data is released at the end of each month, aiming to uncover the true fundamentals and help industry chain participants and investors gain a clearer grasp of the future direction of the non-ferrous metal market.

SMM's monthly base metal production data is scheduled for release at each month-end, aiming to uncover the true state of fundamentals from the ground up, dispel illusions in the capital market for industry chain participants and investors, and provide clearer insights into the future direction of the nonferrous metals market.

SMM's monthly production data for various metals is released at the end of each month, aiming to uncover the true fundamentals for industry chain professionals and investors, and providing a clearer grasp of the future direction of the metals market.

SMM's monthly base metal production data is scheduled for release at each month-end, aiming to uncover the true fundamentals from the ground up, helping industry chain professionals and investors see through the illusions of the capital market and grasp the future trends of the nonferrous metal market more clearly.

In September 2025, SMM refined nickel production increased 1% MoM, up 13% YoY, with cumulative growth of 24% YoY, and the domestic refined nickel enterprise operating rate stood at 66%. Refined nickel enterprises' operating rates diverged in September, as some cut production due to tight raw material supply, but leading large plants maintained normal output as planned. Coupled with delays in production increases from newly commissioned refined nickel projects, overall domestic production showed no significant fluctuations. Price-wise, the average spot price of SMM #1 refined nickel in September was 122,623 yuan/mt, up 678 yuan/mt MoM, with prices rising slightly. In the spot market, the average premium for Jinchuan #1 refined nickel in September was 2,200 yuan/mt, down 100 yuan/mt MoM, while the premiums and discounts for mainstream domestic electrodeposited nickel ranged from -150-200 yuan/mt, lower than the previous month. Demand side, downstream demand in September fell short of expectations. Spot trading volume recovered slightly compared to August, with buyers only stockpiling for rigid demand when nickel prices were at relatively low levels, showing limited purchasing enthusiasm. Looking ahead, affected by tight intermediate product raw material supply and temporary delays in new refined nickel projects, refined nickel output is unlikely to see substantial increases in the short term. October refined nickel production is expected to increase slightly by 2% MoM.

【SMM Nickel Market Flash】A new analysis from New America suggests the U.S. withdrawal from global climate leadership has created a competitive dynamic between the EU and China for partnerships in the Global South. This allows resource-rich nations like Indonesia to move beyond raw material exports by negotiating "mini trade deals" that include technology transfer and domestic industrial development. The report uses Indonesia's 2020 ban on raw nickel ore exports as a key example. The policy forced Chinese firms like Tsingshan and CATL to invest heavily in building local smelters and refineries, significantly boosting Indonesia's refined nickel output. However, the analysis also notes that this rapid industrialization has come with steep environmental and social costs.