Nickel futures markets were influenced by escalating U.S.-Iran tensions and news of production halts at Huadi's Indonesian nickel plant. LME nickel closed up 1.64%. The latest LME nickel settlement was $19,255, an increase of $310 per ton from the previous session, with a trading volume of 8,121 lots. In the domestic market, overnight Shanghai nickel futures settled at 148,250 yuan per ton, rising 1,220 yuan, or 0.83%.
LME nickel inventories on May 11 were reported at 276,840 tons, a decrease of 948 tons from the previous day.
Shanghai nickel futures opened higher across the board today. The main June 2606 contract opened at 148,200 yuan per ton, up 1,170 yuan from yesterday's close. As of 9:15 AM, the main June 2606 contract was quoted at 149,260 yuan per ton, an increase of 2,230 yuan. Shanghai nickel futures opened strong and maintained high levels. The sudden escalation of U.S.-Iran tensions has triggered volatility in global commodity markets, with geopolitical risks boosting oil prices and raising concerns over metal supplies. Coupled with U.S. stock markets hitting new highs, which has driven a broader recovery in risk assets, the base metals sector is experiencing a broad rally. Nickel became the day's top gainer. Beyond the systemic boost from the geopolitical situation, the sudden production halt and output reduction at a major nickel producer in Indonesia served as a core catalyst for the significant upward movement in nickel prices.
The entire nickel supply chain is under pressure, with a structural supply gap becoming more apparent. The supply-demand divergence across different segments of the nickel industry continues to intensify, with the whole chain facing multiple cost and supply pressures. For lateritic nickel ore, Indonesia has significantly reduced its annual mining quota and implemented a new pricing mechanism that includes associated metals in the calculation, substantially raising raw material costs for hydrometallurgical processing. In the sulfide nickel ore sector, the pace of new global capacity release has been slow, keeping overall supply in a long-term tight state.
The nickel intermediate products segment has been impacted by sulfur supply disruptions in the Middle East, leading to a noticeable decline in global nickel-cobalt hydroxide production. Multiple hydrometallurgical plants have been forced to reduce operating rates. In the nickel pig iron (NPI) sector, a leading Indonesian smelter has suddenly halted all production. Combined with a sequential decline in overall local output and domestic steel mills being in their peak seasonal production period, the tight supply-demand balance has worsened further. Supply in the recycled nickel segment remains generally stable, but its limited capacity scale cannot effectively fill the structural gap emerging in the primary nickel market.
Nickel price forecast for May 12 suggests strong, high-level fluctuations. Overall, nickel prices are expected to maintain a strong, high-level volatile trend today. On the macro front, the market awaits the U.S. April CPI data. If inflation is lower than expected, it could strengthen expectations for a Federal Reserve rate cut, further boosting metal prices. On the industry front, the sulfur shortage issue is difficult to resolve in the short term, and the impacts of the Huadi production halt and Huafei output reduction will continue to unfold. Technically, LME nickel has broken through the key resistance level of $19,300 per ton, opening up further upside potential. It is expected that domestic nickel prices today will fluctuate between 148,500 and 149,500 yuan per ton, while LME nickel is forecast to trade between $19,300 and $19,450 per ton. Trading strategy suggests focusing on buying on dips, while monitoring LME inventory changes and developments at Indonesian smelters.
(Note: This is an original analysis for reference only and does not constitute investment advice.)