The weak demand for stainless steel and high inventory pressure put the price of nickel under pressure. The main contract of Shanghai nickel once fell below 108,000 yuan/ton, but the macro pessimistic expectations, the limited supply of nickel market, and the continued decline of exchange stocks will provide nickel prices. Long-term support, nickel prices are expected to maintain a volatile upward trend.

As part of the nickel sulphide mine was converted to nickel sulphate production, domestic electrolytic nickel production in January-June was reduced by 8% to 71,300 tons. Affected by environmental protection inspectors, the operating rate of major nickel-iron production areas in the country was suppressed to varying degrees. In June, the national nickel-iron plant operating rate was 37%, down two percentage points from the previous month. In June, high-nickel pig iron fell by 14.3% to 2.8. Ten thousand tons. The overall supply of nickel-iron in the country has maintained a tight pattern.

In the medium and long term, according to the State Council’s “Three-Year Action Plan to Win the Blue Sky Defence War”, environmental inspection will become a normalization action. The operating rate of the ferronickel plant will continue to be affected by environmental protection. The actual increase in production of ferronickel is unlikely to reach market expectations. In terms of imports, the import volume of ferronickel fell by 30% year-on-year in January-March. As Indonesia’s Qingshan Phase III 1 million tons of stainless steel has been put into production, the Indonesian ferronickel reflow pressure has been significantly reduced. It is expected that ferronickel imports will continue to decline.

On the demand side, the demand for nickel for stainless steel has maintained steady growth, while the demand for nickel for electric vehicles and other fields has shown a rapid growth trend. According to the National Bureau of Statistics, the cumulative production of new energy vehicles nationwide in January-June was 476,000, a significant increase of 88.1% over the same period last year. The relevant leaders of the China Automobile Association said that the production and sales of new energy vehicles in the first half of this year were far better than in the same period of the previous year. It is expected that the production and sales of new energy vehicles in the whole year of 2018 is expected to exceed 1 million. According to the Ministry of Industry and Information Technology’s “Resolutely Fighting the Three-Year Action Plan for Pollution Prevention and Control in Industry and Communication Industry”, it is estimated that the production and sales volume of new energy vehicles in China will reach 2 million in 2020, and the demand for high-nickel ternary batteries is expected to maintain strong growth.