According to data from the Changjiang Nickel Market, the spot price for 1# nickel on the Changjiang market averaged 130,050 yuan per tonne today, rising 1,200 yuan in a single session. The latest price for Shanghai nickel futures is 129,330 yuan per tonne, up 630 yuan. While prices are rising across the board, the underlying drivers present a conflicting picture, with bulls and bears holding opposing views.
The spot price rebound stems from a confluence of traders covering short positions and supply-side disruptions in mining, leading to a concentrated release of buying interest. However, the weaker gains in futures compared to spot prices reflect lingering market caution regarding the underlying demand strength. A tug-of-war between bulls and bears is unfolding around the 129,000 yuan level, with no consensus yet on the potential for further upside.
The average price for nickel sulfate remained flat at 33,100 yuan per tonne, while nickel chloride held steady at 39,300 yuan per tonne. Demand for nickel salts within the new energy battery chain shows no signs of improvement, with procurement from battery manufacturers remaining cautious. The divergence in demand structure is intensifying, and downstream sectors are absorbing price increases at a sluggish pace.
Stainless steel, as the primary consumer of nickel, holds the key to demand strength through its production schedules. Currently, steel mills have limited tolerance for high-cost raw materials, and expectations for a peak season demand surge have yet to materialize. The market's capacity to absorb demand has become the primary concern clouding the price recovery, making it difficult for supply-side narratives alone to sustain the rally.
Reports from the CCMN platform on July 14th indicate that market prices for nickel ore in Indonesia are trading at a discount to benchmark prices, leaving small and medium-sized miners struggling with low prices and high taxes. While supply-side disruptions provide a floor for prices, they cannot mask the reality of slow downstream absorption. This contradiction continues to build within the industrial chain.
Shanghai nickel exchange inventories stood at 99,097 tonnes as of the week ending July 10th, a weekly decrease of 2,525 tonnes. While the destocking trend persists, the absolute inventory level remains elevated. This suggests that metal is moving through the supply chain rather than being consumed by end-users. Genuine demand recovery still requires confirmation, and the inventory signal does not yet support a one-sidedly optimistic outlook.
If stainless steel production schedules increase as anticipated, nickel prices may find support from the demand side. Conversely, if procurement remains cautious, the spot price rally may struggle to fully translate into futures gains. Market focus will subsequently shift to steel mill tenders and nickel salt transaction volumes, as the true quality of demand will ultimately dictate the direction of prices.