Nickel futures on the Shanghai market saw a slight increase in afternoon trading. The main contract for July 2024 (2607) opened at 138,650 yuan per tonne, reaching a session high of 140,520 yuan and a low of 138,200 yuan. It closed at 139,090 yuan, up 350 yuan or 0.25%. Trading volume for the July contract stood at 275,398 lots.

Market statistics show that on June 8th, the comprehensive 1# nickel price range was 140,000 to 141,300 yuan per tonne, with an average price of 140,650 yuan, marking an increase of 1,350 yuan from the previous day. The spot 1# nickel price range was 140,050 to 141,450 yuan per tonne, averaging 140,750 yuan, up 1,400 yuan. In Guangdong, the spot nickel price range was 140,950 to 141,350 yuan per tonne, with an average of 141,150 yuan, representing a gain of 1,100 yuan.

Key Macroeconomic Drivers

The US May non-farm payrolls report exceeded expectations, demonstrating the labor market's continued resilience. This has effectively ended market expectations for an interest rate cut within the year, with sentiment shifting towards potential further hikes. Consequently, the US dollar and Treasury yields have risen in tandem. This high-interest-rate environment is prompting capital outflows, leading to a broad decline in global risk assets. Market attention is now turning to the upcoming first policy meeting of the new Federal Reserve Chair, with subsequent economic data and developments in the Middle East remaining key focal points. Domestically, the nickel market is in its seasonal consumption lull, yet demand from the new energy sector remains robust, and stainless steel restocking is gradually commencing. Indonesia's significant tightening of nickel ore supply is pushing up raw material and smelting costs. These positive industry-specific factors are countering broader macroeconomic headwinds, intensifying the tug-of-war between bullish and bearish forces in the nickel market. Spot nickel prices in the Yangtze River spot market edged higher during the session.

Current State of the Supply Chain and Spot Trading

The nickel raw materials market is currently facing widespread structural shortages, with supplies across various categories continuing to tighten. This provides fundamental support for the rebound in nickel prices. Lateritic nickel ore supply is constrained due to reduced Indonesian quotas and insufficient shipments from the Philippines. High-quality sulfide nickel ore resources are scarce, with limited new capacity additions. The release of nickel matte increments is slow, and inventories remain at low levels. Affected by rising sulfur prices, MHP production capacity has contracted, leading to a sharp reduction in available supply. Recycled nickel production growth has also stalled due to raw material and technological bottlenecks. With rising costs upstream in the supply chain, midstream participants are actively building inventories, while downstream demand from stainless steel and new energy sectors remains firm. Spot trading activity has improved, with downstream consumers engaging in concentrated restocking. Traders are holding back supplies, leading to stronger spot premiums. However, some market participants are maintaining a wait-and-see attitude.

Short-Term Outlook and Price Forecast

Nickel prices are expected to show strength initially on June 8th-9th, followed by range-bound fluctuations, and caution is advised against chasing the rally. Market focus will be on speeches from Federal Reserve officials and Eurozone economic data. Close attention should also be paid to the finalization of Indonesia's nickel export quota details and geopolitical developments in the Middle East. In the short term, nickel prices are anticipated to trade within a range of 139,000 to 141,000 yuan per tonne, supported by expectations of tighter supply. If Indonesia's policies are further tightened, prices could find upward momentum. However, a persistently strong US dollar would likely cap the overall upside potential.

(Note: This is an original analysis for reference only and does not constitute investment advice.)