Nickel futures on the Shanghai Futures Exchange rose in afternoon trading today. The main June 2024 contract opened at 146,000 yuan per ton, reaching a high of 146,770 yuan and a low of 142,320 yuan before closing at 145,390 yuan. This represents an increase of 2,680 yuan, or 1.88%. Trading volume for the main June contract was 382,043 lots.
According to market data, the average price for 1# nickel on May 20 was 143,200 yuan per ton, an increase of 1,100 yuan from the previous day, with a price range of 142,100 to 144,300 yuan. Spot prices for 1# nickel averaged 143,400 yuan per ton, up 1,250 yuan, ranging from 142,600 to 144,200 yuan. In Guangdong, spot nickel prices averaged 144,250 yuan per ton, down 300 yuan, with a range of 144,050 to 144,450 yuan.
Market analysis indicates that external macro factors are mixed. The hawkish signals from the May FOMC minutes strengthened the US dollar, putting pressure on commodities. However, this negative impact was fully offset by the tightening of nickel ore policies in Indonesia. Additionally, the sulfur shipping crisis triggered by Middle East tensions has increased the costs of hydrometallurgical processing, further fueling expectations of nickel supply contraction. Domestically, robust demand from China's new energy vehicle sector, the rigid demand for nickel in power batteries, and inventory replenishment needs from stainless steel enterprises are providing solid fundamental support for nickel prices. The interplay of these bullish and bearish factors is directly driving nickel prices higher against the broader trend.
The nickel industry is experiencing a comprehensive supply tightening from upstream to downstream, creating a chain reaction from raw materials to intermediate processed products, with market transmission effects becoming prominent. Lateritic nickel ore supply is tightening overall due to policy controls in producing regions, leading to slower production paces in key areas and a noticeable reduction in available market supply. Sulfide nickel ore faces challenges from declining resource quality and insufficient industry investment, resulting in weak momentum for capacity expansion.
Production of various nickel products in the midstream is generally constrained. The output of nickel matte has contracted overall, with leading producers actively reducing production volumes. Products related to hydrometallurgical processing are hampered by shortages of supporting raw materials, disrupting operations at several overseas production bases. Electrolytic nickel and recycled nickel production is affected by equipment maintenance and insufficient raw material supply, making it difficult to fully utilize actual capacity.
Across the entire nickel industry chain, a comprehensive supply-side tightening has become the norm. Tight nickel ore supply is driving up raw material prices. The industry is gradually forming a pattern where upstream prices are rising, midstream trends are stalemated, and downstream demand is diverging. The overall tight supply situation throughout the industry chain continues to be prominent.
Spot trading and positioning are characterized by strength at high levels and cautious capital. The overall spot market trend is strong, with active trading in high-grade ferronickel and high enthusiasm among traders for procurement. The spot premium for electrolytic nickel remains consistently high, with downstream purchases primarily based on immediate needs.
There is a clear divergence in fund positioning. Holdings in the overseas nickel market have decreased, while positions in the main Shanghai nickel contract have increased slightly. With prices at high levels, market capital博弈 is intensifying, the divergence between bullish and bearish views continues to widen, and the overall attitude of capital participation is becoming more cautious.
The short-term trend for nickel prices will focus on four core factors over the next 24 hours: Indonesia's export policy meeting on the evening of May 20 (rumors of concentrated exports may further tighten supply), US initial jobless claims and preliminary PMI data on May 21, speeches by Federal Reserve officials, and developments in US-Iran tensions. Changes in high LME inventories are also crucial. In the short term, nickel prices are expected to remain strong at high levels, with LME nickel targeting $19,000 per ton and Shanghai nickel targeting 146,000 to 149,000 yuan per ton. Supply contraction supports the upward trend, but caution is warranted against potential pullbacks triggered by more aggressive-than-expected interest rate hikes.