Nickel & Stainless Steel Market Update: Volatility, Costs, and Short-Term Outlook

Yesterday, all three major US stock indices fell, while futures prices were mixed. The Dow Jones Industrial Average fell 0.51%, the S&P 500 fell 0.35%, and the Nasdaq Composite fell 0.5%. US crude oil rose 1.58%; LME copper rose 0.45%; LME nickel rose $100 to $15,760/ton, with open interest at 285,153 lots, trading volume at 21,075 lots, and inventory at 255,186 tons; SHFE nickel futures fell 1,030 yuan to 126,440 yuan/ton, with open interest at 132,349 lots and inventory at 38,510 tons.

London metals were mixed, with domestic and international nickel ore prices flat, while nickel pig iron prices rose. News of Indonesia's plan to reduce its 2026 nickel ore quota to 250 million tons continued to circulate, leading to a significant increase in nickel prices for several consecutive days. With the sharp price increase, downstream end-users are adopting a wait-and-see attitude, but oversupply continues to limit further upside potential. Nickel prices are expected to remain volatile with a slightly upward bias in the short term.

In the stainless steel spot market, prices remained unchanged from yesterday. Yesterday's overnight stainless steel market showed strength, with most traders maintaining their quotes this morning, although 316L hot-rolled prices increased, leading to a slight rise in market sentiment.

Overall, the price increases driven by previous news have gradually been digested, and market trading has returned to a more rational pace. Support from nickel-chromium raw material costs and reduced steel mill supply limit the downside potential for stainless steel, but weak end-user demand limits upward momentum. Spot prices are expected to remain volatile in the short term, and continued monitoring is needed to see whether pre-Chinese New Year stockpiling demand can be effectively released and changes in steel mill production plans.