This week, the global commodities market experienced significant volatility amid expectations for monetary tightening and ongoing policy negotiations.

The overall trend for Yangtze spot 1# nickel was one of initial gains followed by a decline, with a brief rally at the start of the week giving way to a pattern of substantial and consecutive daily losses in the latter half, with the downward momentum expanding each day.

Over the past week, the global commodities market was marked by intense fluctuations driven by macro tightening expectations and industry policy dynamics. The lingering impact of the Federal Reserve's hawkish stance from its June meeting continued to influence markets, pushing the U.S. dollar index to a 13-month high and keeping Treasury yields elevated, thereby pressuring the valuation of dollar-denominated industrial metals. Concurrently, the implementation of a provisional U.S.-Iran agreement and the resumption of traffic through the Strait of Hormuz led to a rapid unwinding of geopolitical risk premiums in the Middle East, causing declines in both energy and non-ferrous metals. Adding to this, profit-taking by funds at the quarter's end significantly cooled market risk appetite, leaving investors in a cautious, wait-and-see mode. July represents a critical window for the mid-year revision of Indonesia's nickel mining quota. Market speculation regarding the formal approval of a total quota of 360 million tonnes and the pace of any new quota releases has weighed on nickel prices. Downstream, the traditional off-season for stainless steel persists, demand for high-nickel content from the new energy battery sector is showing marginal weakness, and LME inventory continues to accumulate at high levels. The confluence of these multiple bearish factors has pressured nickel prices lower. However, upstream smelting cost lines continue to provide underlying support, and the inverted cost structure for producing nickel cathode using purchased raw materials remains unchanged, limiting the potential for a deep plunge. The market has entered a phase of intense tug-of-war between macro headwinds and cost support. As the month-end and new month approach, the global macro calendar enters a critical window. The nickel market is currently in a stage dominated by macro negatives in the short term, with cost support underpinning the medium term. A clear trend has yet to emerge, with a weak and volatile pattern being the main theme. An upward breakout would require a clear peak in the dollar, Indonesian quotas coming in below expectations, and a recovery in downstream demand to align. A downward break would necessitate a continued sharp rise in the dollar, the substantial realization of Indonesian quotas, and further inventory accumulation.

Looking at the week in stages, prices opened on the 22nd with a sharp drop of 2,650 yuan per tonne to 134,150 yuan/tonne, influenced by negative overseas sentiment over the weekend. A minor technical rebound occurred mid-week on the 23rd, with a single-day increase of 400 yuan per tonne to 134,550 yuan/tonne, representing a short-term oversold correction. The price then fell 2,050 yuan to 132,500 yuan/tonne on the 24th, dropped another 2,500 yuan to 130,000 yuan/tonne on the 25th, and declined a further 2,200 yuan to 127,800 yuan/tonne on the 26th. This pattern of sustained, high-volume selling saw daily losses consistently exceeding 2,000 yuan per tonne. This persistent decline in nickel prices resulted from a confluence of bearish factors: a strengthening U.S. dollar and hawkish Fed expectations on the macro front, combined with ample nickel supply, weak downstream demand, and rising social inventories on the fundamental side, collectively driving prices to seek lower levels.

Nickel Demand Side: Seasonal Divergence with Underlying Support

In late June, demand across the nickel industry chain showed structural divergence, highlighting traditional off-season characteristics. The stainless steel sector has entered its consumption lull, with production schedules for the 300 series declining month-on-month. This has led to price pressure on nickel pig iron and refined nickel purchases, resulting in thin spot transactions and a continued weakening of nickel iron demand. In the power battery segment, production of ternary precursors remains subdued. Purchases of nickel sulfate, mixed hydroxide precipitate, and nickel matte are primarily for immediate, essential needs, with downstream buyers strongly inclined to push prices down. Only high-end fast-charging and export vehicle models are supporting incremental demand for high-nickel materials. Inventory of pure nickel continues to accumulate, burdened by sluggish stainless steel demand, while demand from electroplating and alloy sectors remains steady, leading to overall quiet trading. Demand for electroplating-grade high-purity nickel sulfate retains some resilience, and nickel-based alloys are seeing a gradual recovery driven by military and shipbuilding orders, becoming one of the few stable growth areas during the off-season.

Nickel Supply Side: Structural Divergence Intensifies

Indonesia's mining quota policy has become the core variable causing market disruption. For laterite nickel ore, market rumors suggest Indonesia's mid-year RKAB mining quota may be raised to 360 million tonnes, a nearly 38% increase from the initial 260 million tonnes at the start of the year. Coupled with increased shipments of low-grade ore from the Philippines during the dry season, expectations for a rapid expansion in ore supply are heating up. Sulfide nickel ore supply remains constrained by the scarcity of high-grade resources, with limited new capacity coming online, keeping supply rigid.

In the intermediate smelting products segment, nickel matte output saw a slight decline due to rotational maintenance of capacity, while nickel iron producers, still constrained by previous raw material costs, show willingness to hold prices and limit sales. Production of wet-process MHP has been suppressed by high sulfur costs, leading to reduced operating rates and actual output falling short of early-year expectations. Spot inventories of pure nickel remain high, with traders actively offering discounts to move stock. Although recycled nickel capacity continues to expand, insufficient circulation of nickel-containing scrap limits its substitution effect for primary nickel. The overall industry chain presents a picture of ample supply with localized, structurally tight balances.

Battery-Grade Nickel Sulfate Weekly Market: One-Sided Decline Under Dual Pressure from Supply-Demand and Macros

This week, Yangtze battery-grade nickel sulfate prices started flat before entering a consecutive downward trend. The average price at the week's start was 33,500 yuan per tonne, which fell over three consecutive days to 32,600 yuan/tonne. The weekly average price was reported at 33,030 yuan/tonne, down 230 yuan from the previous week, with the decline narrowing and stabilizing in the latter half. On the supply side, Indonesian MHP continues to increase in volume, domestic smelting raw materials are sufficient, and producers show strong willingness to sell. On the demand side, the lithium battery industry is in its off-season, with ternary precursor enterprises making small, as-needed purchases and showing low enthusiasm for stockpiling. Adding to this, hawkish Fed rhetoric has pushed the dollar higher, pressuring the entire metals complex. These multiple bearish factors have dragged the price center for nickel salts lower.

Yangtze Electrolytic Nickel Plate Weekly Price: Rally Followed by Sustained Sharp Decline

This week, spot prices for Yangtze electrolytic nickel plate showed a pattern of a minor initial rally followed by four consecutive days of one-sided, sharp declines. The weekly average price was 132,370 yuan per tonne, with a cumulative drop of 1,690 yuan over the week. After briefly rallying to 135,100 yuan on the 23rd, prices declined daily, with the average price falling to 128,700 yuan on the 26th, as the downward momentum intensified. Bearish factors converged: hawkish Fed expectations boosted the dollar, pressuring base metals valuations; the unwinding of Middle East geopolitical risk premiums triggered concentrated profit-taking by longs; expectations for ample Indonesian nickel supply heated up, with inventories accumulating both domestically and overseas; and downstream stainless steel and lithium battery sectors entered their off-season, resulting in sluggish essential demand purchases and thin spot trading. The resonance of these multiple negatives dragged nickel prices persistently lower.

LME nickel inventory followed a downward trajectory of "gradual initial decline followed by accelerated destocking." As of June 20th, inventory stood at 276,192 tonnes, showing a slight two-day reduction to 276,138 tonnes. From June 24th at 275,448 tonnes, it continued to fall to 274,830 tonnes, with the rate of decline significantly widening. Tight overseas nickel ore supply is constraining the flow of electrolytic nickel, while marginal recovery in new energy pure nickel demand, coupled with the diversion effect of delivery stocks, is constructing a solid bottom support for overseas nickel prices.

Outlook and Forecast

Hawkish tones and a strong dollar have led to an extended decline in the nickel market; with inflation showing initial signs of easing and slight warmth, the battle between bulls and bears awaits a new chapter. Reviewing the entire week, the continued impact of the Fed's hawkish decision, a significant升温 in rate hike expectations for the year, and the dollar index hitting a 13-month high have collectively pressured the dollar-denominated non-ferrous sector. LME nickel fell for three consecutive days, accumulating a loss of over 5%, with the lowest point touching $16,660 per tonne. SHFE nickel weakened in sync, testing the 129,000 yuan/tonne level, while the average spot nickel price in the Yangtze market fell to 127,800 yuan/tonne. Quarter-end profit-taking, the rapid unwinding of Middle East risk premiums, coupled with high inventories and supply-demand surplus, contributed to an overall bearish market sentiment. The landing of U.S. May PCE inflation data in line with expectations temporarily eased concerns about aggressive rate hikes, allowing nickel prices to begin a low-level corrective rebound.

Looking ahead to next week, the market will focus on two core macro variables:密集 speeches by Fed officials and the U.S. June non-farm payrolls data. The approval of Indonesia's July nickel ore RKAB quota will be a key industrial inflection point. Nickel prices are expected to maintain a weak, volatile, and corrective pattern, with the LME nickel forecast range between $16,500-$17,500 per tonne, and the Yangtze spot market nickel price expected to fluctuate between 126,000 and 135,000 yuan per tonne.

Investors are advised to maintain a range-trading mindset, primarily looking for selling opportunities on rebounds. Attention should be paid to upstream cost line support levels for potential布局 opportunities, while strictly controlling positions to avoid liquidity fluctuation risks around the quarter-end.