In the nickel futures market, the fading prospect of a U.S. interest rate cut and the rising expectation of a rate hike, coupled with the early release of tariff risks, led to a 0.94% decline in overnight LME nickel. The latest closing price for LME nickel was $18,400 per tonne, down $175, a 0.94% drop, with a trading volume of 9,384 lots. In the domestic market, the overnight Shanghai nickel contract settled at 138,140 yuan per tonne, down 1,070 yuan, a decrease of 0.77%.
LME nickel inventories reported on June 8 were 274,218 tonnes, a decrease of 18 tonnes from the previous day.
According to market analysis, Shanghai nickel futures opened lower across the board today. The main July 2607 contract opened at 138,530 yuan per tonne, 680 yuan lower than the previous close. As of 9:10 AM, the Shanghai nickel main July 2607 contract was quoted at 137,370 yuan per tonne, down 1,840 yuan. Shanghai nickel opened low and continued to decline, with the market maintaining a weak and volatile trend. On the macro front, LME base metals generally fell overnight, with LME nickel declining for five consecutive sessions to hit a more than six-week low. The core driver was a sharp reversal in Federal Reserve policy expectations, with institutions like Goldman Sachs completely abandoning their 2024 rate cut forecasts. The U.S. dollar index hit a two-month high during the session, U.S. Treasury yields remained elevated, putting pressure on commodity valuations. This was compounded by weakness in U.S. tech giants, the domestic electronics and stainless steel industries entering their traditional off-season, continued inventory accumulation for LME nickel, and the approaching U.S. metal tariffs, leading to a concentrated profit-taking by funds. The market is now awaiting guidance from the U.S. May CPI data due on June 11. Nickel prices are expected to continue their volatile downtrend in today's session.
Nickel Raw Material Supply and Demand: Earthquake Disrupts Supply, Persistent Long-Term Supply-Demand Gap Emerges
There is a coexistence of sudden geopolitical supply disruptions and a long-term structural deficit in the raw materials sector. A strong earthquake in the Philippines on June 8 led to a complete suspension of loading operations at major mines in the core nickel-producing region of Mindanao, disrupting shipping in surrounding waters and completely scrambling the arrival schedule for laterite nickel ore. Global new capacity for sulfide nickel ore remains persistently insufficient, and overall primary nickel supply maintains a tight balance. Nickel pig iron production growth is weak, still showing a significant year-on-year decline. The ramp-up of intermediate product capacity, such as nickel matte and nickel-cobalt hydroxide, is far below market expectations. Recycled nickel is being suppressed by the current price level, with the recycling system operating inefficiently, leading to persistently low market circulation.
Current State of the Industry Chain: Dual Pressure from Upstream and Downstream, Supply-Demand Mismatch Intensifies
The entire nickel industry chain is currently caught in a triple dilemma of "volatile upstream supply, pressured midstream inventory, and weak downstream demand." The smelting segment is constrained by the dual pressures of high raw material costs and inverted product prices, with overall operating rates maintained at a medium level, and some high-cost capacity has been temporarily phased out. Downstream consumption continues to weaken, with the stainless steel market officially entering its traditional off-season, leading to a noticeable month-on-month decline in order volumes. Demand growth for nickel in the new energy vehicle battery sector has slowed, failing to provide effective support. All segments of the industry chain maintain a cautious stance, primarily purchasing based on immediate needs. The market lacks the impetus for large-scale inventory replenishment, and inventories of intermediate products are showing a slow accumulation trend.
Key Variables and Nickel Price Forecast for June 9th
The market's core focus today is on three key variables: the latest developments in Iran peace talks, the fluctuation range of the U.S. dollar index, and the timeline for the resumption of operations at Philippine mines. In the short term, macro headwinds are expected to continue dominating market sentiment, with nickel prices trending weakly and remaining volatile. However, solid support from raw material cost floors limits the potential for a sharp decline. It is estimated that today's core trading range for LME nickel will be between $18,100 and $18,500 per tonne, with the corresponding spot nickel price range between 136,500 and 138,000 yuan per tonne. For the medium term, the market needs to await clarity on the Federal Reserve's monetary policy and the initiation of downstream inventory replenishment demand.
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