Market Analysis for Nickel On May 26, 2026, the main nickel contract on the Shanghai Futures Exchange opened at 144,000 yuan per ton and closed at 142,120 yuan per ton, representing a decrease of 1.19% from the previous trading day's closing price. The daily trading volume was 251,000 lots, an increase of 13,229 lots, while open interest decreased by 17,049 lots to 59,948 lots. Price Trend Analysis: The nickel market is currently influenced by a tug-of-war between policy factors and fundamentals. On the policy front, Indonesia is further tightening controls and supervision on bulk commodity exports. A new state-owned enterprise, DSI, has been established to oversee the entire export process for core commodities, including transactions, contracts, cargo delivery, and payments. The initial batch of commodities includes palm oil, coal, and ferroalloys, which notably excludes nickel pig iron but includes ferronickel. These measures are scheduled for full implementation starting September 1, 2026. Regarding fundamentals, on the supply side, Indonesia's Ministry of Energy and Mineral Resources has suspended 106 IUP mining permits due to companies failing to submit their 2026 RKAB (Work Plan and Budget) on time. Affected by power supply issues and the commissioning of new aluminum electrolysis capacity, some high-grade nickel pig iron production lines have undergone maintenance and reduced output since March-April. This pattern of rotational maintenance, maintaining 10-15% of capacity offline, is expected to continue. Concurrently, port inventories of high-grade nickel pig iron have shown a significant drawdown. The rainy season in the Philippines has ended, leading to increased shipments from mines during the dry season, which has contributed to a continued decline in ore prices. Mixed Hydroxide Precipitate (MHP) production is facing some disruptions, and its price remains strong amid tight sulfur supply. On the demand side, stainless steel prices have fallen, pushing mill profits on futures close to the break-even line. This has weakened purchasing willingness, slowed procurement节奏, and fostered a strong wait-and-see sentiment. Mills are currently focused on consuming inventory built up from previous concentrated restocking and show limited acceptance for high-priced nickel iron. In the new energy sector, production and sales of new energy vehicles are meeting expectations, but the market is in a seasonal consumption lull, showing only limited sequential improvement. Production schedules for ternary batteries have increased, contributing to incremental demand. However, in the spot market, downstream companies exhibit weak purchasing intent, mainly buying for immediate needs. Domestic nickel inventories continue to accumulate, putting pressure on any potential price increases.
Nickel Ore Market: According to Mysteel, FOB prices for Philippine nickel ore remain weak. The price for 1.3% grade ore is quoted at $34-37 per wet ton, a cumulative decrease of $3-5 per wet ton since mid-May. For Indonesian ore, the price for 1.4% grade is expected to be pressured down to the range of $58-60 per wet ton, with end-of-month negotiation results pending observation. Freight rates have slightly declined, continuing to ease pressure on landed costs.
Spot Market: Trading activity for refined nickel is generally acceptable, with downstream purchasing enthusiasm showing some improvement. However, the market faces ample spot supply but insufficient消化能力. Warehouse receipts on the Shanghai Futures Exchange and social inventories continue to accumulate, maintaining overall high levels and僵持. Premiums and discounts for various brands of refined nickel are generally stable, with slight declines for products like Jinchuan electrolytic nickel. Specifically, the premium for Jinchuan nickel decreased by 50 yuan to 1,100 yuan per ton. The premium for imported nickel remained unchanged at -250 yuan per ton. The premium for nickel豆 was 250 yuan per ton. In the previous trading day, nickel warehouse receipts on the SHFE stood at 81,090 tons, an increase of 828 tons. LME nickel inventories were 278,886 tons, a decrease of 186 tons.
Macro Environment: Tensions in the Middle East have escalated again. Iran's Foreign Ministry stated that the US has openly violated the ceasefire agreement and that no memorandum of understanding has been reached with the US. This has heightened market risk aversion, pushed oil prices higher, and kept the situation around the Strait of Hormuz焦灼. The outlook for sulfur prices remains uncertain. Wash has officially been sworn in as the new Chair of the Federal Reserve, facing the dual realities of surging US Treasury yields and rising US inflation expectations. Market expectations for interest rate cuts have been further delayed, while expectations for rate hikes have strengthened. The US dollar index is fluctuating at high levels, continuing to suppress prices for non-ferrous metals. Domestically, the May Loan Prime Rate (LPR) remained unchanged, and expectations for steady growth policies persist.
Strategy Current supply contraction coupled with stable demand places policy factors as the primary driver for nickel price movements. Ongoing geopolitical events in the Middle East and反复不定 nickel-related policies in Indonesia are expected to keep nickel prices in a state of high volatility.
Unilateral Strategy: Focus on range-bound trading. Inter-temporal Strategy: None. Inter-commodity Strategy: None. Futures-Spot Arbitrage: None. Options Strategy: None.
Risks Changes in domestic economic policies, changes in Indonesian policies, and a series of policies planned by the new US President.
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