On May 6, 2026, the main nickel futures contract opened at 151,000 yuan per ton and closed at 154,690 yuan per ton, marking a 3.52% increase from the previous trading day. Trading volume stood at 243,189 lots, while open interest reached 177,312 lots.
Nickel is currently influenced by a tug-of-war between policy developments and fundamental factors. On the policy front, Indonesia announced plans on May 4 to impose export duties and windfall taxes on coal and nickel to offset rising subsidy costs in the national budget. Additionally, adjustments to Indonesia's HPM reference price and the gradual implementation of nickel mining quota policies have significantly increased costs for hydrometallurgical processing, providing substantial support for prices. On the supply side, following the depletion of nickel mining quotas at Weda Bay in Indonesia, which is set to undergo maintenance shutdowns, some production lines at Huafei Nickel & Cobalt, a subsidiary of Huayou Cobalt, also began maintenance shutdowns starting May 1. The grade of nickel pig iron produced from Indonesian high-grade nickel ore has declined, reducing output of high-grade nickel pig iron and intensifying tightness in the nickel ore market, fueling bullish sentiment. Production of mixed hydroxide precipitate has also faced disruptions, and with tight sulfur supply, prices remain firm. However, as the rainy season in Indonesia has ended, supply may see some increase. On the demand side, improved profitability at stainless steel mills has increased their acceptance of higher-priced nickel pig iron, providing stable demand support. In the new energy sector, production and sales of new energy vehicles have met expectations, but as the industry is in a seasonal lull, sequential improvements are limited. Ternary batteries contribute modest demand growth. In the spot market, downstream companies remain cautious, purchasing mainly to meet immediate needs. Domestic nickel inventories continue to accumulate, capping upside price potential.
In the nickel ore market, prices in the Philippines have remained stable, while the Indonesian nickel ore market shows a divergence in pricing mechanisms, though cost support remains solid. Two mainstream pricing models coexist: one based on a "benchmark price plus floating premium," where some plants trade using a fixed HPM with premiums ranging from 7 to 16; the other is a fixed-price model, promoted by major nickel pig iron producers, with hydrometallurgical ore offers steady at $28-33 per wet ton. The CIF price for 1.4% grade ore is reported at $64 per wet ton, and for 1.5% grade at $71 per wet ton, overall unchanged from April. Meanwhile, Philippine nickel ore prices have held steady. Overall, nickel ore costs remain high, but the diversity in pricing models reflects intensified negotiations between buyers and sellers.
In the spot market, nickel prices showed strength during the day, but trading activity for refined nickel was limited. Premiums and discounts for various brands were stable to slightly higher; however, as futures prices rose, spot premium/discount transactions decreased. Trading activity was subdued, with traders and downstream firms adopting a wait-and-see approach. The premium for Jinchuan nickel changed by -100 yuan to 1,250 yuan per ton, while the premium for imported nickel remained unchanged at -600 yuan per ton. The premium for nickel beans stood at 2,450 yuan per ton. Nickel warehouse receipts in Shanghai increased by 216 tons to 69,875 tons, while LME nickel inventories decreased by 24 tons to 276,864 tons.
On the macroeconomic front, the White House indicated on the evening of May 6 that it is close to reaching a memorandum of understanding on a ceasefire with Iran, including mutual lifting of navigation restrictions in the Strait of Hormuz, marking the closest the parties have come to an agreement and easing geopolitical risks. U.S. President Donald Trump stated that if Iran agrees to terms proposed by the U.S., the "Epic Fury" operation would end. The Federal Reserve's interest rate meeting confirmed that rates would remain unchanged, with a stronger U.S. dollar putting pressure on the upside for non-ferrous metals. Domestically, the Loan Prime Rate was held steady, expectations for steady growth policies continue, and the economy had a strong start in the first quarter. Infrastructure investment maintained rapid growth, while exports of new energy products surged by over 45%, providing structural support for nickel demand.
Given supply constraints and stable demand, policy developments remain the primary driver for nickel prices. Ongoing geopolitical events in the Middle East and tightening Indonesian nickel policies suggest that Shanghai nickel futures are likely to maintain high volatility in the short term. Market participants should monitor developments in the Middle East, the implementation of Indonesian policies, and changes in domestic inventories, while guarding against sharp fluctuations due to geopolitical news and policy disruptions, as well as potential technical corrections following rapid short-term gains.
For stainless steel, the main contract opened at 15,520 yuan per ton and closed at 15,780 yuan per ton on May 6, 2026. Trading volume was 173,733 lots, and open interest decreased by 4,171 lots to 156,629 lots.
Stainless steel prices continue to follow nickel trends, heavily influenced by Indonesian policies and macroeconomic factors. On the supply side, mills maintain high production schedules. Total domestic crude stainless steel production in April is estimated at 3.6847 million tons, down 0.4% month-on-month but up 5.2% year-on-year. Production of 300-series stainless steel in May is expected to exceed 2 million tons, with post-holiday resumption accelerating, gradually increasing supply pressure. On the demand side, spot procurement is normal, with mills restocking mainly for rigid needs. Consumption is anticipated to recover in May, orders are easing, and inventories are unlikely to rebound, providing bottom support for prices.
Boosted by news, stronger futures prices have increased activity in the spot market, with a notable rise in inquiries. Although downstream firms have not fully accepted high prices and are purchasing mainly for essential restocking, traders are actively making offers. In Wuxi, stainless steel prices rose by 100 yuan to 15,550 yuan per ton; in Foshan, prices increased by 125 yuan to 15,550 yuan per ton. The premium/discount for 304/2B stainless steel ranges from -90 to 110 yuan per ton. According to SMM data, the average ex-works tax-included price for high-grade nickel pig iron increased by 13.00 yuan per nickel point to 1,148.0 yuan per nickel point.
While supply growth expectations outweigh demand-side factors, cost support remains. Macroeconomic and policy influences are the main drivers for stainless steel prices. In the short term, stainless steel is expected to continue tracking nickel prices and maintain a volatile pattern.