On Friday, amid renewed tensions between the U.S. and Iran, non-ferrous metals faced overall downward pressure. However, nickel futures on the Shanghai Futures Exchange saw a significant rally after the morning opening, with intraday gains approaching 3%, standing out as a strong performer among the metals. On the news front, French mining group Eramet plans to suspend nickel production at its Indonesian operations next month while awaiting approval from authorities for additional production quotas. This new supply disruption suggests short-term nickel futures may exhibit stronger performance, with market participants closely monitoring the progress of the production halt.

According to a Mysteel survey, an Indonesian MHP producer recently experienced a sharp increase in sulfur procurement costs, with some sulfur purchases for July delivery reaching a record high of $1100-$1200 per ton. Soaring global sulfur prices, combined with high shipping and rerouting costs, are expected to further increase MHP production expenses. Adjustments to Indonesia's nickel ore benchmark prices and tax calculations are also impacting the market. On one hand, these adjustments have raised costs, causing nickel pig iron prices to shift from decline to growth and further solidifying stainless steel production costs, thereby boosting inventory drawdowns as stainless steel buyers become more active. On the other hand, rising costs for hydrometallurgical ore may gradually tighten MHP supply, with attention turning to whether sulfur prices and availability will recover. Short-term buying opportunities may still exist, but it is important to note that primary nickel inventories remain under significant pressure. Supply-side production cuts may gradually help reduce inventories, which would in turn provide positive feedback to prices. Additionally, with policies largely implemented, the focus will shift to absolute price levels and whether supplementary quotas will be issued in July.