Nickel prices on the Shanghai Futures Exchange showed modest gains today. The most-traded July 2026 nickel contract (2607) opened at 136,220 yuan per tonne. During the session, it reached a high of 137,390 yuan and a low of 135,150 yuan, ultimately closing at 135,840 yuan. This represents an increase of 40 yuan, or 0.03%. Trading volume for the July contract was 183,868 lots.

According to market data, the average price for 1# nickel in the Yangtze River non-ferrous metals market on June 18th was 136,750 yuan per tonne, ranging from 135,950 to 137,550 yuan. This marks a rise of 200 yuan from the previous day. Spot 1# nickel prices in the Yangtze region averaged 136,800 yuan per tonne (range: 136,000-137,600 yuan), up 250 yuan. In Guangdong, spot nickel averaged 137,550 yuan per tonne (range: 137,350-137,750 yuan), increasing by 100 yuan.

Macroeconomic Influences

On June 18, 2026, base metals generally traded within narrow ranges with mixed performance across different metals. Conflicting macroeconomic forces prevented any clear directional trend. The Federal Reserve's early morning meeting minutes conveyed a strongly hawkish stance, signaling an extended period of high interest rates. This, combined with a stronger US dollar and rising Treasury yields, placed downward pressure on metal prices. However, these headwinds were offset by factors providing support. Easing geopolitical tensions between the US and Iran helped cool inflation expectations, while domestic pro-growth policies and resilient demand from high-end manufacturing offered a counterbalance. Additionally, tight supply conditions at the mining level for some metals provided a floor for prices. With the industry in a seasonal consumption lull and market participants adopting a wait-and-see approach, price volatility was further constrained, resulting in limited overall movement for most metals.

Diverging Supply-Demand Dynamics Across Nickel Raw Materials

The supply-demand picture varies across different nickel feedstocks. Laterite nickel ore remains in a tight balance due to significantly reduced mining quotas in Indonesia, with incremental supply from the Philippines only partially filling the gap. Supply of sulfide nickel ore is stable with limited volatility. Nickel matte supply has seen a slight increase following adjustments to overseas production lines. Nickel-cobalt hydroxide production is being hampered by tight sulfur supply, leading to lower operating rates and tighter availability of circulating material. Meanwhile, ample supply of recycled nickel is slightly capping the upside for spot prices.

Industry Chain Dynamics and Pre-Holiday Spot Trading

The industry chain is characterized by "supportive raw material costs but weak end-user demand." The stainless steel sector, a major nickel consumer, has entered its traditional off-season, with mills reducing production schedules and pushing for lower prices. Demand for nickel in new energy ternary battery materials remains steady based on essential needs, but high finished product inventories are leading to conservative purchasing. As the Dragon Boat Festival holiday approaches, traders are winding down operations and reducing inventory holdings, resulting in thin trading activity in the spot market. Transactions are limited to essential, small-lot purchases, and the fluctuations in premiums and discounts have narrowed.

Pre-Holiday Macro Focus and Nickel Price Outlook

In the near term, two key variables warrant close attention. The first is the outcome of diplomatic negotiations between the US and Iran; a successful agreement could ease inflation pressures, which would be bearish for industrial metals. The second is the detailed implementation rules for Indonesia's nickel ore mining quotas, as the degree of tightening will determine the strength of supply-side support. Nickel prices are expected to continue trading within a range in the short term. The downside is supported by mining costs and production cut expectations, while the upside is capped by inventory accumulation and weak seasonal demand, eliminating the foundation for a sustained one-way trend.

Investment and Positioning Considerations

For investors, short-term strategies could involve trading within the expected range, buying low and selling high, while strictly controlling position sizes to mitigate risks from potential holiday-related geopolitical or inventory shocks. Industrial consumers should purchase based on immediate production needs and avoid large-scale pre-holiday stockpiling. For medium to long-term positioning, it is advisable to monitor the finalization of overseas interest rate policies and adjustments to nickel industry policies in Southeast Asia, waiting for a clearer turning point in supply and demand fundamentals before increasing allocations.