Nickel futures on the Shanghai market declined in the afternoon session today. The main SHFE nickel contract for September 2025 opened at 126,830 yuan per tonne. During the session, it reached a high of 127,260 yuan and a low of 125,630 yuan, ultimately closing at 125,640 yuan. This represents a drop of 1,240 yuan, or 0.98%, from the previous close. Trading volume for the September 2025 contract stood at 236,883 lots.
According to market data, the average price for 1# nickel in the Yangtze River nonferrous metals market on July 8th ranged from 125,550 yuan to 128,150 yuan per tonne, settling at an average of 126,850 yuan. This marks a decrease of 1,100 yuan from the previous day. Spot 1# nickel prices in the Yangtze River region were quoted between 125,550 yuan and 128,150 yuan per tonne, averaging 126,850 yuan, also down by 1,100 yuan. In Guangdong, spot nickel prices were between 128,450 yuan and 128,850 yuan per tonne, with an average of 128,650 yuan, reflecting a 1,050 yuan decline.
Market Analysis
Escalating tensions between the US and Iran have impacted markets. US airstrikes on Iranian oil and gas facilities and the revocation of oil export sanction waivers have significantly heightened shipping risks in the Strait of Hormuz, leading to a sharp rise in oil prices. Divisions within NATO during its summit have prompted markets to reassess inflation expectations. Concurrently, expectations for a Federal Reserve interest rate cut have been pushed back, strengthening the US dollar and putting pressure on the valuation of industrial metals.
Domestically, policies aimed at stabilizing growth in the real estate sector are being implemented, with additional support directed towards computing power and humanoid robotics. In the nonferrous metals sector, supply-side capacity remains constrained with tight raw material availability. These factors, combined with the seasonal consumption lull and weather-related disruptions, are creating a market dynamic characterized by a tussle between cost support and macroeconomic headwinds. Spot nickel prices in the Yangtze River market experienced a corrective pullback today.
Industry Chain Divergence
The upstream raw material segment shows clear divergence. Laterite nickel ore supply remains in a tight balance for high-grade material, constrained by Indonesia's annual mining quota system. The application window for supplementary quotas in July is open, but new quotas are tied to local smelting capacity, limiting the volume available for pure export. Global supply growth for sulfide nickel ore is limited, leading to stable overall supply and demand with narrowing price fluctuations.
Significant differences are evident in the midstream smelting sector. High-grade matte nickel continues to see increased output due to cost advantages in pyrometallurgical processes, forming the core incremental supply of intermediate products. Nickel-cobalt hydroxide supply has contracted year-on-year, constrained by both raw material availability and environmental factors. The proportion of recycled nickel in nickel sulfate feedstock is steadily increasing, providing ongoing supplementary supply to the market. Overseas, hearings on trade tariffs are progressing steadily, with expectations of a restructuring in global nickel trade costs, which is unsettling market sentiment.
Spot Trading Activity
Against the backdrop of weak and fluctuating nickel prices, bearish sentiment has intensified in the spot market. Traders and downstream consumers are largely adopting a wait-and-see approach, showing weak willingness to enter the market for procurement. Downstream buyers are primarily engaged in replenishing stocks based on immediate needs, with no signs of large-scale inventory building. Spot premiums remain low, and the bargaining range for intermediate products has widened simultaneously. Overall trading activity is subdued.
Short-Term Outlook
Internationally, the core focus will be the release of the Federal Reserve's meeting minutes on July 9th. Any hawkish signals could further bolster the strength of the US dollar. Domestically, close attention will be paid to the progress of detailed implementation rules for growth-stabilizing policies. A comprehensive assessment suggests that in the short term, nickel prices are likely to continue their weak and volatile trend, pressured by both macroeconomic negatives and a weak fundamental picture. Market participants should remain vigilant for potential fluctuations arising from recurring geopolitical tensions and adjustments to Indonesia's quota policies.
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