The nickel futures market saw London Metal Exchange (LME) nickel close 0.72% higher, with energy price declines easing inflation concerns and supporting a broader recovery in the industrial metals sector. LME nickel's latest settlement price was $18,085 per tonne, up $130. On the domestic front, Shanghai nickel futures also gained during the night session, with the most recent contract settling at 136,620 yuan per tonne, an increase of 820 yuan or 0.6%.
LME nickel inventories reported on June 17 stood at 276,402 tonnes, an increase of 528 tonnes from the previous day.
Shanghai nickel futures opened higher across the board today. The main July 2607 contract opened at 136,220 yuan per tonne, up 420 yuan from the prior close. By 9:15 AM, the contract was quoted at 136,100 yuan, a gain of 300 yuan, trading in a narrow range after the higher open. On the macro front, the Federal Reserve's June policy decision held rates steady but struck a hawkish tone, boosting the US dollar and pressuring US equities, which in turn weighed on the broader industrial metals complex. Despite this, LME nickel managed to rise against the trend overnight. The core driver was supply contraction fears stemming from policy disruptions in Indonesia's mining sector, coupled with ongoing drawdowns in exchange inventories. These industry-specific positives outweighed the broader macro pressures, pushing prices higher. Domestic nickel prices are caught in a narrow range today, with upside limited by a stronger dollar and cautious downstream purchasing, while downside is supported by tightening ore supply, high smelting costs, and production cut expectations. In this environment of weak supply and demand, bullish and bearish forces are relatively balanced, leading to thick market观望 and a contraction in price volatility.
Structural Divergence in Supply Chain
A clear divergence is evident on the raw materials front. Laterite nickel ore remains in tight balance due to significant quota reductions in Indonesia, with incremental shipments from the Philippines only partially offsetting the shortfall. Supply of sulfide nickel ore remains generally stable with limited volatility. High-grade matte nickel is seeing marginal supply increases following adjustments to Indonesian capacity. Nickel-cobalt hydroxide (MHP) output is falling short of expectations due to sulfur shortages, supporting firmer prices. Supply of recycled nickel is relatively ample, exerting some downward pressure on spot prices. Downstream, the stainless steel sector has entered its traditional low season, with mills slowing production schedules and showing strong price negotiation intent. Demand for ternary materials in the new energy sector is stable to slightly higher, but high inventory levels are leading to a cautious procurement节奏.
Macro Outlook Hinges on Two Key Variables
Market focus going forward centers on two key variables. First is the progress of US-Iran talks in Switzerland on the 19th; a potential agreement could ease energy inflation pressures, which would be bearish for industrial metals. Second is the implementation details of Indonesia's mining policies, as the enforcement of quotas will directly determine the extent of supply contraction. Nickel prices are expected to continue their narrow-range震荡 in the near term, with a core fluctuation range around 135,000 to 141,000 yuan per tonne. An区间 trading approach is recommended, with close attention to shifts in macro sentiment and industry policy developments.