Trend Analysis
According to nickel price monitoring by SunSirs, nickel prices saw a slight decline in June; the price stood at 143,716.67 RMB/ton at the beginning of the month and dropped significantly to 127,800 RMB/ton by the end of the month, representing an overall decrease of 11.08% and a year-on-year increase of 4.78%.
Market Analysis
On the macro front, the Federal Reserve kept interest rates unchanged at 3.50%-3.75% at its June meeting but removed the bias toward monetary easing from its policy statement; the "dot plot" indicated that nine committee members supported at least one rate hike before the end of the year. Following hawkish remarks by Fed Governor Warsh, the US Dollar Index rose 2.1% in June, with traders betting on a rate hike as early as July. Deteriorating macroeconomic expectations put broad pressure on risk assets, and nickel prices weakened in tandem with the broader non-ferrous metals sector in the absence of significant positive drivers.n
Regarding supply, Indonesia's nickel ore policy represents the most significant variable this month. Market rumors suggesting that Indonesia plans to raise its full-year 2026 RKAB mining quota from approximately 260 million tonnes to 360 million tonnes—and the resulting expectation of expanded supply—have directly breached the price floor for SHFE nickel. However, Indonesia's Ministry of Energy and Mineral Resources subsequently stated that the annual quota has not yet been finalized, indicating continued policy uncertainty. In terms of output, China's refined nickel production stood at 33,251 tonnes in May (down 5.67% month-on-month), with a projected output of 33,745 tonnes for June (up 1.49% month-on-month). Supply in the nickel pig iron (NPI) sector has tightened, driven by some Indonesian smelters switching production to nickel matte and production cuts at the Tsingshan industrial park to prioritize electricity for aluminum operations. Regarding inventories, LME nickel stocks stand at approximately 276,000 tonnes and domestic social inventories at 126,000 tonnes; inventory pressure for Class I nickel continues to mount.
On the demand side, downstream consumption remains generally sluggish. Stainless steel crude steel production schedules for June have been slightly revised down to approximately 3.6 million tonnes, impacted by maintenance at some steel mills and the traditional off-season for consumption; while production of the 300-series remains high, the pace of growth has slowed, limiting demand for nickel pig iron. In the new energy sector, demand for ternary materials is stable to improving but shows limited growth, with companies primarily purchasing to meet immediate needs; the average price of battery-grade nickel sulfate stands at around 34,000 RMB/ton, marking a week-on-week decline. Demand for electroplating remains stable but lacks growth momentum, while alloy consumption is gradually recovering. Overall, the market is characterized by a demand floor supported by essential needs, yet lacks significant incremental growth.
Imports and exports: Refined nickel imports in May totaled 30,121.79 tonnes—down 15.11% month-on-month but up a substantial 71.78% year-on-year—while exports stood at just 658.33 tonnes, a sharp year-on-year drop of 95.29%; this "one-way inflow" pattern exacerbated inventory accumulation. Nickel pig iron (NPI) imports in April reached 849,800 tonnes, up 3.2% month-on-month, with Indonesia serving as the primary source. As of late June, LME nickel inventories stood at approximately 275,000 tonnes and SHFE inventories at around 97,000 tonnes; both remain at high levels.
Influencing factors
Indonesia's nickel ore quota policy is the key variable this month. Expectations for a quota increase mark a sharp reversal from the restrictive stance held at the beginning of the year; if implemented, this would significantly boost nickel ore supplies. Additionally, ore arrivals are rising as the rainy season in the Philippines concludes; sulfur prices have softened following the easing of US-Iran tensions; and Jinchuan Group lowered its ex-factory nickel price by 2,100 RMB/ton on June 25, sending a clear signal of price reduction to the market. Faced with this confluence of bearish factors, nickel prices are under significant downward pressure.
Market outlook
In summary, the trajectory of Indonesia's quota policy remains the primary source of uncertainty: a significant increase in quotas to over 340 million tonnes would place further downward pressure on nickel prices, whereas maintaining tight quotas would limit the downside due to cost support. At the macro level, expectations of Federal Reserve rate hikes and a strong US dollar continue to cap the upside; however, a slight shortage of nickel pig iron (NPI) and high-grade nickel matte provides cost support. In the medium term, a mix of bullish and bearish factors—including policy fluctuations in Indonesia, sulfur costs for hydrometallurgical processing, and structural demand growth from the new energy sector—suggests that nickel prices will likely experience wide-ranging volatility, with prices currently fluctuating near the 130,000 RMB/ton level as they seek a bottom.
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