Nickel Market Update

Advisory Bazaar Info Services

Tropical Depression Luis May Disrupt Philippine Nickel Supply Chain

Tropical Depression Luis is bringing heavy rainfall, strong winds, and rough sea conditions to northern Philippines, particularly northern Luzon. While the system is expected to weaken into a remnant low by August 5, persistent rainfall and localized flooding may temporarily disrupt mining operations, ore loading, and vessel departures. The industry continues to monitor the storm’s impact on mine production, port operations, and nickel ore shipments.

Macro Developments

US-Iran negotiations have commenced, raising expectations for the gradual normalization of shipping through the Strait of Hormuz. Improved logistics are easing sulphur cost pressures, contributing to the recent decline in nickel prices.

Meanwhile, the People’s Bank of China (PBOC), during its H2 2026 policy meeting, reaffirmed its commitment to maintaining an appropriately accommodative monetary policy to support economic growth.

Spot Market

On August 3, SMM #1 refined nickel averaged 131,400 yuan/mt, down 1,200 yuan/mt from the previous trading session. Jinchuan #1 refined nickel premiums eased to 1,150 yuan/mt, while mainstream domestic electrodeposited nickel traded between -300 yuan/mt and +500 yuan/mt.

Futures Market

The most-traded SHFE Nickel 2609 contract fell sharply by 1.91%, closing the morning session at 129,520 yuan/mt.

Improving geopolitical sentiment and expectations of normal shipping through the Strait of Hormuz have weakened sulphur cost support, weighing on nickel prices. In the near term, SHFE nickel is expected to trade within the 128,000–135,000 yuan/mt range.

Nickel Sulphate

Battery-grade nickel sulphate prices edged lower as declining nickel prices reduced production costs. However, elevated MHP payables and high sulphuric acid prices continue to support overall production costs.

Demand remains subdued as downstream precursor manufacturers rely largely on long-term contracts and existing inventories, limiting spot purchases. As a result, nickel sulphate prices are expected to remain under pressure in the short term.

Nickel Pig Iron (NPI)

The high-grade NPI market remained largely balanced, with suppliers maintaining firm offers while downstream stainless steel mills continued cautious procurement.

Although sellers remain reluctant to reduce prices, softer nickel prices and slower purchasing activity have limited further upside, keeping the market range-bound.

Stainless Steel Market

Stainless steel futures weakened alongside declining SHFE nickel prices, while spot prices remained relatively stable due to firm mill pricing and raw material cost support.

Demand continues to be affected by the seasonal slowdown, and downstream buyers remain cautious. With steel mills gradually resuming production and August output expected to increase, supply is likely to outpace demand, creating downside pressure on stainless steel prices in the coming weeks.

Philippine Nickel Ore Market

Nickel ore prices remained broadly stable despite increasing mine supply. Chinese smelters continue to maintain sufficient inventories, resulting in limited spot buying.

Weather conditions are expected to remain mostly favourable next week, although localized heavy rainfall in Zambales may cause temporary disruptions to mining and logistics.

Low-grade ore prices are expected to remain under pressure amid abundant supply, while high-grade ore prices should remain relatively resilient.

Indonesia Nickel Ore Market

Indonesia’s domestic nickel ore prices softened following lower HMA and HPM benchmark prices for early August. However, ample supply and cautious procurement have kept transaction prices broadly stable.

The market remains focused on the approval of additional RKAB mining quotas, which will play a crucial role in determining Indonesia’s second-half nickel ore supply and the overall market outlook.

Market Outlook

Nickel prices are expected to remain under pressure in the near term as improving Middle East geopolitical conditions reduce cost support while downstream demand remains subdued. Market participants will closely monitor developments in US-Iran negotiations, Philippine weather conditions, Indonesia’s RKAB approvals, and China’s stainless steel demand for further price direction.