Haitong Futures: Supply Tightness Expectations Continue, Nickel Price Center Rises

On February 10th, Indonesia’s Ministry of Energy and Mineral Resources (ESDM) officially announced that the nickel ore production target set in the 2026 RKAB is between 260 million and 270 million tons. At the same time, Weda Bay Nickel, the main supplier of nickel ore for Indonesia’s Sulawesi Island and the Greater K Island (the world’s largest nickel-iron industry base), was approved for less than 15 million wet tons, a reduction of 70%. Overall, the approval rate for Qingshan is only about 30%. The policy-driven tightening of the supply side has begun to take effect. Following this news, the Shanghai Nickel futures market started to rise significantly from the night session on February 10th. The financial attributes of nickel and its strategic metal status have strengthened, and the decline of the US dollar index is conducive to price increases. The significant divergence between Kingsun nickel premium and imported nickel, along with structural shortages in spot circulation, relatively favorable financing and trade demand, and the overall rise in industry costs, all limit the downside potential of nickel prices. It is expected that the news will amplify the elasticity of nickel prices while continuing the narrative of tight supply expectations. Coupled with the overall increase in industry costs, structural differences in inventories, and macroeconomic support, the overall operating center of Shanghai nickel main contract prices is projected to rise, potentially stabilizing normally between 135,000 and 140,000 yuan. Further catalysts from HPM are awaited. Investors are advised not to be overly bearish due to the traditional broad view of “oversupply.” (Haitong Futures)