According to the monitoring of the commodity market analysis system of SunSirs, on June 17, spot electrolytic nickel was quoted at 120,008 RMB/ton, a weekly decline of 3.32% and a year-on-year decline of 13.15%. The loosening of Philippine policies has exacerbated the expectation of oversupply vs. the actual supply bottleneck and cost support in Indonesia. Under the interweaving of long and short factors, nickel prices are under pressure and fluctuate.

Macroeconomics suppresses demand expectations

1. US tariffs: The tariff upgrade on steel derivatives (home appliances) directly suppresses the demand for stainless steel. About 70% of nickel's terminal consumption comes from the stainless steel field, and the negative transmission is obvious.

2. Domestic manufacturing industry is weak: The decline in the growth rate of manufacturing output in May reflects the weak demand for industrial metals, but the retail data exceeded expectations and showed the resilience of the consumer end. Policy stimulus expectations may delay the decline.

3. The geopolitical risk premium has subsided: The situation in the Middle East has a greater disturbance to the crude oil market. Nickel, as an industrial metal, pays more attention to the actual supply and demand, and the short-term impact of geopolitical factors is limited.

Supply side: long-short game

The Philippine bicameral committee decided to remove the ban on raw ore exports from the final version of the Mining Fiscal System Act, exacerbating expectations of oversupply.

At present, Indonesia has issued quotas of about 300 million wet tons, but due to the mismatch between the actual shipping capacity and production capacity of most mines, coupled with continued rainy weather in Indonesia, the actual shipment volume is lower than expected.

Cost support: The domestic trade benchmark price in June (Phase II) is expected to fall by about US$0.3-0.5. The decline is limited, and high-cost mines are still willing to support prices.

Inventory changes: LME nickel inventory increased by 5,844 tons to 204,936 tons during the cycle, and domestic Shanghai nickel inventory increased by 1,049 tons to 22,241 tons during the cycle. The global inventory increase is obvious, and the oversupply pattern continues.

Demand side: weakening on both lines

Stainless steel market: On June 17, the spot price of stainless steel was 12,916 RMB/ton, a weekly decline of 1.4%. In June, the stainless steel production schedule decreased by 2.91% month-on-month. The accumulated inventory was under pressure, and the terminal demand was sluggish.

New energy field: Lithium iron phosphate batteries squeezed the share of ternary batteries, and the growth rate of demand slowed down.

Market forecast: Inventory was under pressure, demand was poor, and costs were firm. Pay attention to macro and policy information. It is expected that nickel prices will remain in a range of fluctuations.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.