Nickel Market Analysis
On September 16, 2026, the main Shanghai nickel contract opened at 123,870 yuan per tonne and closed at 122,040 yuan per tonne, representing a decline of 1.64% from the previous trading day's close. Trading volume reached 213,937 lots (up 104,419 lots), while open interest stood at 124,179 lots (down 2,760 lots).
Price Trend Assessment
Indonesian policy uncertainty has entered a period of intense negotiation, with expectations of looser regulations continuing to build momentum. Meanwhile, Jakarta has signaled that export oversight may be expanded further. The 2027 annual RKAB work plan is scheduled to begin its declaration process in October, with some enterprises already preparing their quota submissions; however, several mid-term quotas for 2026 are still awaiting approval. WBN has resumed production, though specific details regarding the pace of ramp-up, production rates, and intermediate-term quotas remain undisclosed.
On the supply side, El Ni帽o conditions continue to disrupt Indonesian nickel ore output, though the actual magnitude of the impact is still being assessed. The HPM regulation has been revised once again, with Indonesia's ESDM signing Decision No. 363.K/MB.01/MEM.B/2026, which further adjusts the nickel ore pricing framework. Under the new rules, the CF for low-grade nickel ore (Ni鈮?.2%) has been substantially reduced to 14%, significantly lowering the HPM benchmark price for low-grade ore. Sulfur prices remain elevated in the short term but are showing signs of marginal easing. Due to concerns about high prices, the MHP market is experiencing a loose supply-demand balance, with MHP coefficients under downward pressure. High-grade nickel matte coefficients have remained stable, while the high-nickel pig iron market is clouded by a pessimistic atmosphere, with prices declining sharply amid expectations of supply recovery and cautious downstream purchasing.
On the demand side, expectations for the traditional "golden September, silver October" peak season have fallen short. End-user demand remains weak, and the anticipated pre-stocking ahead of the peak season has not materialized, keeping transaction activity subdued. This week, steel mills have shown notable easing in price support, with spot quotes following the futures market lower. The 304 cold-rolled product continues to operate at a loss, and the inversion between inventory costs and raw material prices has deepened. Although scrap stainless steel still maintains a clear cost substitution advantage, it cannot withstand the fundamentally weak market, and prices have come under pressure, preventing the substitution benefit from being realized. In the new energy sector, cathode material output continues to grow modestly on a month-over-month basis, with August ternary cathode material production reaching 91,090 tonnes, up 2.1% sequentially. Downstream enterprises are showing weak purchasing intent, primarily engaging in just-in-time procurement.
Nickel Ore Dynamics
According to Mysteel data, low-grade ore prices remain at depressed levels, while medium and high-grade ore prices have declined notably from earlier periods. Today's FOB quotes from select Philippine mines are as follows: 1.2% grade at $23 per tonne, 0.9% grade at $26 per tonne, 1.25% grade at $27.5 per tonne, and 1.3% grade at $30.5-31.5 per tonne. Philippine nickel ore FOB quotes continue their downward trajectory, with cost support from the ore end further weakening.
Spot Market Overview
Jinchuan nickel premiums have strengthened, while premiums for electric-deposited nickel brands and imported brands have been revised upward, leading to an overall improvement in trading sentiment. From September 7-13, shipments of nickel ore from the Philippines to Indonesia totaled 468,300 wet metric tonnes, more than doubling from 215,100 wet metric tonnes the previous week. In August, China and Indonesia's combined nickel pig iron production increased by 4.52% month-over-month, while nickel intermediate product output from the hydrometallurgical process declined by 3.06% sequentially. Specifically, the Jinchuan nickel premium rose by 950 yuan per tonne to 3,850 yuan per tonne, imported nickel premiums increased by 50 yuan per tonne to 100 yuan per tonne, and nickel briquette premiums stood at 50 yuan per tonne. As of the previous trading day, SHFE nickel warehouse receipts totaled 94,694 tonnes (down 643 tonnes), while LME nickel inventories reached 278,790 tonnes (up 210 tonnes).
Macroeconomic Context
Market participants widely anticipate a rate hike in the early hours of the 17th, with attention now shifting to the tone of the meeting statement, the post-meeting dot plot, the possibility of consecutive rate increases toward year-end, and whether a "dovish hike" will be delivered. Conditions in the Middle East have shown no signs of improvement, shipping activity has not increased, and sulfur prices continue to fluctuate at elevated levels.
Trading Strategy
Key factors to monitor include Indonesia's mid-term RKAB quotas and the US FOMC meeting scheduled for the 15th-16th. Given the persistently weak supply-demand fundamentals, policy and macroeconomic factors have emerged as the primary drivers of nickel price movements. Recurring volatility in the Middle East, expectations of looser Indonesian policies, a fluctuating US dollar, and elevated inventory levels all cap upside potential. Meanwhile, smelting costs and thin profit margins provide support on the downside, suggesting nickel prices will likely continue to trade in a range. Recent sessions have seen amplified volatility and growing divergence in nickel prices, with intraday breaks of key support levels triggering short-term overshooting. Traders should exercise prudent position management while monitoring Indonesia's quota developments and the spillover effects from macroeconomic and non-ferrous metals markets.
Single-Leg Strategy: Range trading is recommended.
Calendar Spread: None.
Cross-Commodity: None.
Futures-Basis: None.
Options: None.
Risk Factors
Domestic economic policy changes, Indonesian policy adjustments, and repeated statements from the US President.
Stainless Steel Market Analysis
On September 16, 2026, the main stainless steel contract opened at 13,510 yuan per tonne and closed at 13,540 yuan per tonne. Trading volume reached 225,591 lots (up 117,625 lots), with open interest at 131,925 lots (down 4,171 lots).
Trend Assessment
The stainless steel sector has entered its traditional peak season, yet demand during this period remains unverified, and the anticipated large-scale pre-stocking ahead of the Mid-Autumn Festival and National Day holidays has not yet materialized. On the fundamentals front, the China Iron and Steel Association released the "Initiative for Comprehensive Self-Regulation of Production Control and Inventory Reduction in the Steel Industry" on September 15. The initiative explicitly requires the entire industry to strictly enforce production control requirements and condemn any output exceeding targets. It also emphasizes self-regulatory production cuts, inventory reduction, and leveraging the market-oriented role of steel enterprises to rapidly bring elevated stock levels down. The European Union has implemented a new steel trade mechanism, establishing stainless steel quotas, raising additional tariffs, and introducing "melting and casting" rules of origin restrictions. Additionally, the State Council has issued the "15th Five-Year Plan for Urban Renewal," guiding cities toward integrated transformation and promoting trillion-yuan investments in urban renewal projects.
On the supply side, mills' high production schedules continue to increase month-over-month, though significant divergence exists across product categories. September production plans have been slightly revised downward to 3.6173 million tonnes, a 3.31% decline month-over-month but still up 5.56% year-over-year. By series, both the 200 and 400 series show reduced output month-over-month, while the 300 series has only marginally declined. While September supply has contracted slightly from August, absolute production levels remain elevated, with the year-on-year increase not yet eliminated. On the demand side, traditional stainless steel-consuming industries remain sluggish. Fixed asset investment from January to August fell 7.2%, with manufacturing investment down 2.3% and infrastructure down 4.0%. Real estate development investment dropped 19.9% year-on-year during the same period, new construction starts fell 24.8%, and new home sales area declined 12.1%. Several home appliance sectors are seeing reduced production schedules, with September 2026 combined production plans for air conditioners, refrigerators, and washing machines totaling 27.21 million units, down 4.0% from year-earlier actual output. By product category, September home air conditioner production plans stand at 9.75 million units, down 7.7% from year-earlier output; refrigerators at 8.52 million units, down 2.3%; and washing machines at 8.94 million units, down 1.2%. Traditional sectors lack substantial replenishment momentum, with demand primarily limited to essential needs.
Spot Market
Futures prices reversed sharply from declines to gains, and spot quotes followed suit, yet market participants remain cautious. Transaction activity is generally limited to just-in-time purchasing, with subdued trading volumes, as peak-season stocking has yet to unfold on the anticipated scale. Wuxi market stainless steel prices are quoted at 14,100 yuan per tonne (down 100 yuan), while Foshan prices stand at 14,100 yuan per tonne (down 75 yuan). The 304/2B premium-discount range is 655 to 1,055 yuan per tonne. According to SMM data, the average ex-works price of high-nickel pig iron including tax declined by 18.50 yuan per nickel point to 1,057.5 yuan per nickel point.
Strategy
Fundamentals indicate that supply growth expectations outweigh demand strength, and with raw material prices moving lower in tandem, cost support may continue to shift downward. Macroeconomic and policy influences have become the primary drivers of stainless steel price movements. With the peak season failing to deliver expected demand, the market is expected to maintain a weak range-bound pattern.
Single-Leg Strategy: Neutral stance.
Calendar Spread: None.
Cross-Commodity: None.
Futures-Basis: None.
Options: None.
Risk Factors
Domestic economic policy changes, real estate policy adjustments, Indonesian policy changes, and repeated statements from the US President.