According to market data, nickel prices edged lower on July 6th. The most-traded Shanghai Futures Exchange (SHFE) nickel contract for September 2025 opened at 126,770 yuan per tonne, reached an intraday high of 127,500 yuan and a low of 125,970 yuan, before closing at 126,890 yuan, representing a small increase of 120 yuan, or 0.09%. The trading volume for the September contract stood at 243,393 lots.
Nickel Price Overview
Statistics show that the comprehensive 1# nickel price range on July 6th was between 126,450 and 129,050 yuan per tonne, with an average price of 127,750 yuan, marking a decline of 800 yuan from the previous day. The spot 1# nickel price range was also between 126,450 and 129,050 yuan per tonne, averaging 127,750 yuan, which was 850 yuan lower than the prior session. In Guangdong, the spot nickel price ranged from 129,300 to 129,700 yuan per tonne, with an average of 129,500 yuan, down 250 yuan from the day before.
Market Analysis and Macro Backdrop
July 6th saw a concentration of key macro signals both domestically and internationally, creating a pivotal pricing window for global asset classes. Internationally, the US June non-farm payrolls report significantly missed expectations, with slowing job growth momentum coupled with easing inflationary pressures in production. This has led to a rapid cooling of expectations for further Federal Reserve interest rate hikes. Meanwhile, OPEC+ finalized its plan to increase production in August, heightening concerns over a potential crude oil supply surplus. Domestically, the People's Bank of China executed a one trillion yuan outright reverse repo operation, confirming a monetary easing stance for the second half of the year. With the US dollar facing short-term pressure and US equities showing structural divergence, the tug-of-war between bulls and bears in the non-ferrous metals complex has intensified, while the structural mismatch in nickel raw material supply and demand persists.
Raw Material Supply and Demand Dynamics
The nickel supply chain currently exhibits significant structural divergence. Laterite nickel ore is in a state of overall tight balance. While Indonesia continues to advance its quota control policies for mining, market expectations exist for a potential relaxation of these quotas mid-year. Shipments of nickel ore from the Philippines are gradually returning to normal levels. Global reserves of sulfide nickel ore remain scarce, with new capacity coming online slowly, underpinning a long-term narrative of tight supply. Output growth for nickel matte has fallen short of early-year expectations due to constraints from conversion profitability. Nickel-cobalt hydroxide (MHP) production costs for hydrometallurgical processes have risen, supported by high sulfur prices, leading to output reductions at some enterprises and a noticeable slowdown in supply growth. The scale of recycled nickel is growing modestly, limited by scrap recycling channels. This creates a pronounced mismatch, with refined nickel inventories at the midstream remaining elevated against a backdrop of upstream raw material tightness.
Current Spot Trading Conditions
In terms of trading activity, open interest in the futures market saw a slight increase during the session, with a stronger inclination for short positions to be added, maintaining a characteristic of weak, range-bound trading. The spot market, however, experienced tepid activity. Traders adjusted their offers in line with market movements, while downstream enterprises procured based on immediate needs, resulting in overall low transaction activity.
Short-Term Price Outlook
Looking ahead to July 6th-7th, international macro focus will center on speeches from Federal Reserve officials and the evolution of inflation expectations. The US Dollar Index is likely to fluctuate within a range of 100.6 to 101.2. Domestically, key attention will be on the liquidity transmission effects of the large-scale reverse repos and signals from manufacturing demand. In the short term, nickel prices are expected to continue their pattern of weak, range-bound movement, with a projected fluctuation range of 126,000 to 129,000 yuan per tonne. Prices face persistent pressure from macro sentiment on the upside, while smelting costs provide support on the downside. Market participants should remain vigilant for risks of short-term, sharp price swings triggered by unexpected movements in the US dollar.
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