On April 7, 2025, the Shanghai nickel main 2505 contract opened with a limit down. Although it opened soon afterwards, it still recorded a 7.51% decline during the day, closing at 118640 yuan/ton.

1、 Macro sentiment sluggish, overall pressure on bulk commodities

The main trigger for the decline in nickel prices this time is the so-called "equivalent tariffs" imposed by the United States

On the early morning of April 3, 2025, US President Trump signed two executive orders at the White House regarding so-called "equivalent tariffs", announcing that the United States would set a "minimum benchmark tariff" of 10% for all trading partners and impose higher tariffs on certain trading partners, such as a 34% tariff on China, which would take effect on April 9 Eastern Time. The next day, China took strong countermeasures against the US tariff policy, announcing a 34% tariff on all US goods, listing 11 US companies as unreliable entities, suspending the export qualifications of six US companies to China, and implementing export controls on some medium and heavy rare earth related items.

At present, China's refined nickel export flows mainly to Taiwan, China, Singapore, South Korea and other LME warehouses. At present, Singapore has said that it will not take countermeasures against US tariffs, and South Korea and Taiwan, China are not expected to take corresponding countermeasures. According to Chinese customs data, since January 2023, China has exported a total of 1979.92 tons of refined nickel to the United States, which is less than 1% of China's total exports. The so-called "equivalent tariffs" administrative order of the United States has little impact on refined nickel exports. But the market is concerned that the US tariffs may impact the downstream nickel industry, further exacerbating global supply chain uncertainty and indirectly weakening industrial demand for nickel.

At present, Canada is the main source country for refined nickel in the United States. The trade of refined nickel between the two countries is detailed in "Mysteel: Canada may stop exporting nickel to the United States. Can the US tariff policy continue to be implemented. On the 3rd, Canadian Prime Minister Carney announced in Ottawa new countermeasures against US tariff policies and a series of latest support measures for affected businesses and practitioners. Among them, Canada will impose a 25% tariff on fully assembled vehicles imported from the United States that do not comply with the US Canada Mexico Agreement. At the same time, Canada will also impose a 25% tariff on non Canadian and non Mexican parts of fully assembled vehicles imported from the United States that comply with the US Canada Mexico Agreement.

2、 Poor fundamentals of refined nickel, gradually diminishing supply side bullish factors

The fundamental surplus pattern of refined nickel remains unchanged, with LME inventories remaining high and domestic refined nickel production expected to continue to increase. According to Mysteel's survey of 20 sample companies nationwide, China's refined nickel production in March 2025 was 36665 tons, an increase of 10.61% month on month and 50.19% year-on-year; The cumulative production of refined nickel in China from January to March 2025 was 103389 tons, an increase of 44.46% year-on-year.

In addition, the policy combination that has recently supported nickel prices on the Indonesian supply side is difficult to fully implement, and the bullish factors are gradually diminishing due to the end of Eid al Fitr and the rainy season in major production areas.

3、 Nickel prices fall below cost line, with cost support expected to decrease

According to calculations, the current nickel price has fallen below the cost of refining nickel through the integrated process of high ice nickel, and the loss of refining nickel from external raw materials has further expanded. However, the current price of nickel ore in Indonesia is bound to LME prices, and the production cost of refined nickel is expected to decrease. After the market pessimism gradually subsides, the cost of refined nickel is expected to re support nickel prices.

4、 Summary

At present, the market is affected by the so-called "equivalent tariffs" imposed by the United States, and the overall sentiment is low. Although China's exports of refined nickel to the United States account for less than one percent of China's total exports, the market is concerned that the imposition of tariffs by the United States may impact downstream nickel industries, further exacerbating global supply chain uncertainty and indirectly weakening industrial demand for nickel. In addition, the pattern of oversupply of refined nickel remains unchanged, and the policy combination supporting nickel prices on the Indonesian supply side in recent times is difficult to fully implement. With the end of Eid al Fitr and the rainy season in major production areas, the favorable factors are gradually diminishing. The current nickel price has fallen below the cost of refining nickel through the integrated process of high ice nickel. However, the price of nickel ore in Indonesia is currently tied to LME prices, and the production cost of refined nickel is expected to decrease. After the pessimistic sentiment in the market gradually subsides, nickel prices are expected to have a certain degree of oversold rebound.