The nickel futures market saw a rebound as a weaker US dollar and supply concerns prompted capital flows back into the sector. Overnight, LME nickel closed up 0.79% at $17,955 per tonne, with a trading volume of 6,195 lots. On the domestic front, Shanghai nickel's night session closed at 135,850 yuan per tonne, a slight increase of 0.07%.
According to data from the London Metal Exchange (LME), nickel inventories stood at 275,874 tonnes on June 16, marking an increase of 942 tonnes from the previous session.
Shanghai nickel futures opened higher across the board today. The main July 2607 contract opened at 135,870 yuan per tonne, up 110 yuan from the previous close. As of 9:15 AM, the contract was trading at 135,840 yuan per tonne, an 80-yuan gain, showing narrow-range fluctuations after the higher opening.
From a macro perspective, overnight strength in LME nickel has shifted market sentiment from cautious to somewhat bullish. Internationally, expectations are solidifying that the US Federal Reserve will hold rates steady in June, leading to a phase of dollar weakness and a retreat in US Treasury yields. This has created a window for a valuation rebound in US dollar-denominated industrial metals. A de-escalation of Middle East geopolitical risks has narrowed supply chain disruption premiums, further strengthening liquidity support for commodities. On the industry front, ongoing compliance rectifications in Indonesia's mining sector continue to fuel concerns over a potential contraction in nickel ore supply, which is attracting capital back into the nickel market. Domestically, continued efforts to stabilize growth and bolster the new energy industry are strengthening expectations for underlying downstream demand support. Combined with a recovery in risk appetite within the US stock market's structural trends, these factors are collectively reinforcing the floor for nickel prices.
Structural Tightness in Nickel Raw Materials Persists Amid Industry Divergence
A pronounced structural disparity is evident in raw materials. Indonesia's planned significant reduction of approximately 30% in nickel ore mining quotas for 2026 is leading to a sustained tightening in the supply of high-grade laterite nickel ore. Globally, high-quality sulfide nickel ore resources remain scarce, with new mine projects facing lengthy commissioning periods, keeping primary nickel raw materials in a state of tight balance. In the intermediate product segment, the release of incremental nickel matte is being constrained by equipment retrofitting delays, while nickel-cobalt hydroxide production has been impacted by previously high sulfur prices, leading to reduced operational rates at multiple plants and consequently tight spot market availability. Although recycled nickel supply is steadily increasing, its overall market share remains low, offering limited substitution for primary nickel. The overall industry chain is characterized by strong raw material constraints, divergence in intermediate products, and solid underlying downstream demand.
Today's Global Focus and Short-Term Outlook for Nickel
Key global market focuses for June 17 include signals from the US Federal Reserve's interest rate decision and the release of US May retail sales data. Domestically, the Lujiazui Forum is also expected to provide important policy guidance. A comprehensive assessment suggests nickel prices are likely to maintain a volatile but slightly stronger trend in the short term. Indonesia's quota policy provides a solid base of support, while upward movement will need to monitor inventory accumulation pressures and the pace of downstream demand realization. Moving forward, it will be crucial to continuously track the progress of Indonesia's mining rights enforcement, the extent of recovery in intermediate product output as sulfur prices decline, and the pace of demand recovery within the new energy industry chain.