This week, domestic spot nickel prices exhibited a V-shaped reversal pattern.
From June 15th to 18th, Yangtze Spot 1# Nickel first experienced a slight dip, followed by two consecutive days of sharp gains. The four-day average price was 136,562.5 yuan per ton, with a cumulative increase of 75 yuan per ton over the period.
On June 15th, macro tailwinds dominated, driving a significant price rise. The price range was 135,550-137,550 yuan/ton, with a market average of 136,550 yuan/ton, marking a modest daily gain of 50 yuan. The uptick was primarily fueled by multiple converging positive macro factors. A de-escalation in Middle Eastern geopolitics following a US-Iran memorandum of understanding significantly reduced regional conflict risks, leading to a rapid decline in market risk aversion and a continued flow of funds back into commodity markets. Concurrently, markets anticipated potential Federal Reserve policy easing in June, betting on the start of a rate-cut cycle within the year. This pushed US Treasury yields lower and weakened the US dollar, triggering a valuation recovery for dollar-denominated industrial metals like nickel. Domestically, pre-holiday stocking demand for the Dragon Boat Festival, coupled with optimistic expectations for pro-growth and new energy industry support policies, significantly boosted overall market risk appetite. Furthermore, the absence of major negative data from overseas allowed global risk assets to rally collectively, supporting steady gains in LME Nickel prices. This combined strength from both domestic and international markets ultimately pushed both Shanghai Nickel and Yangtze Spot 1# Nickel higher.
On June 16th, a shift in macro expectations towards the negative caused nickel prices to retreat from their highs. The price range was 135,350-137,350 yuan/ton, with the average falling to a weekly low of 136,350 yuan/ton, a daily drop of 200 yuan. Market participants began pricing in hawkish risks from the Federal Reserve, prompting profit-taking by longs. A slight rebound in US Treasury yields and a stabilization in the dollar exerted pressure on base metals. Additionally, US markets pre-priced high May inflation data, raising investor concerns about more aggressive Fed tightening, leading to collective long liquidation in commodities. Domestically, with the Dragon Boat Festival holiday approaching, risk-off sentiment grew, and traders reduced positions ahead of time, dampening the sustainability of the rally. Persistent weakness in Eurozone manufacturing PMI data heightened fears of an industrial demand recession overseas, limiting the upside for LME Nickel and transmitting weakness to domestic nickel prices.
June 17th saw the price range at 135,550-137,550 yuan/ton, with the average rebounding to 136,550 yuan/ton, a strong daily increase of 200 yuan. The market was in a holding pattern ahead of the imminent Federal Reserve interest rate decision, with both long and short funds pulling back as participants awaited policy clarity. Trading activity decreased, and price volatility narrowed. During the day, a fluctuating but strengthening dollar, as markets positioned for a hawkish outcome, continued to pressure metals. However, the US-Iran geopolitical de-escalation provided underlying support, creating a balance. Signals from the Lujiazui Forum regarding domestic financial market stability and expectations for domestic liquidity easing helped counterbalance overseas tightening fears, limiting downside space. The bearish impact of continuously accumulating LME Nickel inventories was overshadowed by the market's wait-and-see stance on macro policy, making macro factors the dominant market driver.
On June 18th, the price range was 136,000-137,600 yuan/ton, with the average hitting a new weekly high of 136,800 yuan/ton, rising another 250 yuan and sustaining the upward momentum. In the early hours (Beijing Time), the Federal Reserve's June policy decision was announced, holding the federal funds rate steady at 3.50%-3.75%, in line with expectations. However, the Fed delivered a strongly hawkish message, completely dashing hopes for near-term easing. Rising US Treasury yields pressured growth stock valuations, increasing market risk aversion and volatility. Yet, institutional views diverged, with some seeing limited room for further rate hikes if inflation cools and employment weakens, suggesting potential for a market recovery later. The US dollar retreated slightly after an initial spike, and US Treasury yields pulled back after a brief surge, alleviating some pressure on dollar-denominated nickel prices. Domestically, with the holiday imminent, short sellers took profits and exited. Funds began positioning for potential post-holiday domestic growth support and new energy consumption recovery expectations, with bargain-hunting buying providing a floor. The medium-to-long-term bullish logic of the US-Iran reconciliation in the Middle East regained dominance in driving market risk appetite, offsetting the negative impact of high US interest rates. LME Nickel prices stabilized and recovered, pulling Shanghai Nickel higher in tandem. As global markets had already partially priced in the possibility of another Fed rate hike later in the year, and with no new major macro negatives emerging in the short term, nickel prices concluded the week within a range-bound pattern.
Current State of Nickel Supply This Week
Persistent high temperatures and heavy rainfall in southern and southeastern China disrupted domestic nickel raw material supply across the entire chain from mining and smelting to logistics this week. Coupled with structural differentiation in overseas resources, the supply-demand dynamics within the industrial chain showed significant divergence. Upstream mining areas in China faced disruptions in mining and transportation of laterite and sulfide nickel ores due to flooding and landslides, tightening local raw ore supply. Midstream nickel pig iron and nickel matte smelting operations were impacted by high temperatures and rain, leading to reduced operating rates and maintenance. High sulfur prices and drainage pressure at hydrometallurgical MHP/MSP plants further restricted the release of hydrometallurgical capacity, creating a shortage of intermediate product spot supply. Overseas, Indonesia's tightening of RKEF quotas for laterite nickel ore and tight supply of high-grade ore could not be fully offset by increased volumes from the Philippines. While overseas nickel pig iron output remained stable, unloading at domestic ports and intra-plant transportation were less efficient due to rain. Downstream, refined nickel imports were ample, and inventory accumulation pointed to a loose supply. Non-integrated nickel sulfate producers cut output, tightening battery-grade material supply. Recycled nickel production, being less affected by weather, had ample circulating supply, which helped counter low-price pressure. Overall, supply was tight for upstream ore and hydrometallurgical intermediates, while refined nickel and recycled nickel supply was loose. The southern rainy season exacerbated logistical bottlenecks across the entire industrial chain, intensifying structural supply-demand contradictions for nickel raw materials.
Current State of Nickel Demand This Week
In mid-June 2026, nickel industrial chain demand exhibited a pattern of weak, differentiated recovery. The traditional off-season for stainless steel dragged on the overall market, with only new energy and electroplating/alloy sectors providing differentiated, rigid demand support. Procurement rhythms varied significantly across downstream segments. The stainless steel industry entered its traditional off-season, with domestic 300-series steel mills reducing production schedules month-on-month, pressuring down purchases of nickel pig iron and refined nickel. Spot transactions were sluggish. Although mill profitability remained acceptable and slight production cut expectations provided some support for raw materials, overall nickel pig iron demand continued to weaken. Resilience in the power battery sector declined as terminal new energy growth slowed. Precursor production for ternary batteries retreated, cooling procurement appetite for nickel sulfate, MHP, and nickel matte. Demand for nickel bean dissolution contracted, and some nickel salt producers faced cost pressures and cut output, indicating a weaker-than-expected peak season. Rigid demand from electroplating and nickel-based alloys remained stable, with small-batch, as-needed restocking for high-purity nickel sulfate and refined nickel, showing stronger demand stability for high-end materials. Ample supply of recycled nickel scrap diverted consumption from primary nickel. Combined with a stronger US dollar prompting downstream overseas buyers to adopt a wait-and-see approach, most segments of the industrial chain focused on destocking. Only the new energy sector provided modest support, resulting in generally quiet overall market activity.
The weekly average price for Yangtze Composite Plating-Grade Nickel Sulfate was stable at 37,050 yuan/ton, but it plunged 2,000 yuan on the 18th to 35,050 yuan/ton. The week showed a pattern of initial stability followed by a cliff-like drop, with the full-week average reported at 36,550 yuan/ton, down 500 yuan week-on-week, and the high-low price gap widening significantly. The core bearish factors were the decline in downstream ternary precursor production, and tightened regulatory scrutiny on automakers weakening procurement expectations for high-nickel materials. The market saw only rigid demand purchasing with low restocking willingness. This, combined with a strong dollar pressuring base metals futures, loose primary nickel supply, and upstream producers offering discounts to move inventory, led to a concentrated release of negative factors driving spot prices down rapidly.
Market Performance of Electrolytic Nickel
From June 15th to 18th, Yangtze Composite Market Electrolytic Nickel (plate) also exhibited a V-shaped pattern. The average price was 137,200 yuan/ton on the 15th, fell to a weekly low of 136,600 yuan/ton on the 16th, and then rebounded for two consecutive days, reaching 137,150 yuan/ton on the 18th. The week overall showed a pattern of initial decline followed by a recovery and bottom repair. Short-term volatility was driven by two phases: the decline on the 16th stemmed from market concerns over potential easing of Indonesian nickel ore quotas and weak stainless steel procurement during its off-season, triggering concentrated long liquidation. The rebound on the 17th-18th was supported by expectations of supply contraction due to tightened controls on Indonesian mining companies, coupled with trader restocking after an oversold market and a softer dollar boosting metal futures, leading to a recovery in spot buying that pushed prices to recoup losses.
Inventory Trends
This week, LME Nickel inventories showed a continuous accumulation trend. After a minor decrease of 6 tonnes to 274,932 tonnes on June 13th, inventories surged by 942 tonnes to 275,874 tonnes on the 16th, and increased by another 528 tonnes to 276,402 tonnes on the 17th, accelerating the pace of accumulation. The core driver was an increase in arrivals and warehousing of overseas refined nickel, coupled with weakening overseas procurement demand from stainless steel enterprises and low willingness for end-consumer stockpiling. This, combined with short-term arbitrage-related warehousing by traders, continuously pushed up exchange visible inventories. This inventory accumulation pressure capped the rebound potential for nickel prices. Short-term inventory increases may persist, requiring ongoing monitoring of the recovery pace in overseas consumption.
Market Outlook and Analysis
After a week of defensive positioning, the nickel market is building momentum ahead of the holiday reopening. This week saw the dense landing of global geopolitical and domestic financial policies, including the US-Iran memorandum easing Middle East risks and the Lujiazui Forum signaling financial opening, with multiple focal points resonating to keep nickel prices in a narrow range. Approaching the Dragon Boat Festival holiday, key overseas factors to track include inflation data, central bank policy signals, and geopolitical developments. Domestically, focus will be on pro-growth support policies, operating rates in the stainless steel and new energy downstream sectors, and pre-holiday risk-off sentiment. The market's core attention remains on the US dollar index, nickel ore supply constraints, and terminal procurement. Nickel prices are being pulled by three main factors: overseas monetary policy, Indonesian mining controls, and seasonal demand weakness. Pre-holiday spot transactions are expected to remain light, with cost-side factors providing underlying support. In the short term, Yangtze Spot 1# Nickel is expected to fluctuate within a range of 134,000-139,000 yuan/ton, while LME Nickel is anticipated to trade between $17,500-$18,900/ton. Post-holiday, range-bound trading is likely to continue. Before the holiday, investors are advised to engage in light-position, short-term trading to avoid overnight holiday risks, potentially establishing small long positions based on low cost support and taking timely profits when facing resistance at higher levels. After the market reopens, focus should shift to overseas macro data releases during the holiday, adjusting positions based on US dollar fluctuations and downstream restocking rhythms. Consider establishing medium-to-long-term long positions on dips while strictly controlling the risk of heavy one-sided exposure.