Chinese Taiwan's stainless steel mills have announced August price increases of NT$1,500/ton for 304 flat-rolled products, initiating active pricing negotiations with downstream distributors while maintaining firm cost-support price levels. Despite sluggish market demand, producers are holding price floors supported by LME nickel prices stabilizing above US$17,000 in July and August, steady Indonesian raw material quotations, and a weakening New Taiwan Dollar trading near 32.447 against the US dollar. Distributor purchasing direction is expected to become clearer as negotiations conclude.

LME nickel prices strengthened in July, rising from US$16,175/mt on July 1 to a monthly high of US$17,205/mt on July 24, before easing to US$16,860/mt on July 28. Despite the late-month pullback, prices remained approximately 4.2% higher than at the start of July. The price rally was mainly supported by improving macroeconomic sentiment, as expectations of further Federal Reserve rate hikes weakened, boosting risk asset performance and pressuring the US dollar. In addition, disruptions to shipping through the Strait of Hormuz raised concerns over potential supply risks for Middle East sulphur, while expectations of tighter nickel ore supply from Indonesia provided further support to the market. Meanwhile, LME nickel inventories continued to decline through most of July, falling from 274,230 mt on July 1 to 267,522 mt on July 28, a net reduction of 6,708 mt. Although inventories saw a slight rebound toward the end of the month, stock levels remained below early-July levels, reinforcing a more supportive market sentiment.

LME nickel futures gained 1.3% last week for a second consecutive weekly advance, though prices slipped below US$17,000 on Friday (July 17), closing at US$16,961/ton, down US$191 on the day. Spot prices fell US$185 to US$16,767/ton. The Friday downturn was driven by global equity market declines and Fed officials' comments on potential rate hikes amid AI-driven inflation concerns. Despite the late-week pullback, nickel remains up 4.18% for the month, with LME inventories declining 564 tons to 274,284 tons. Market participants attribute recent gains to strong expectations tied to pending Indonesian mining quota decisions and rising oil prices from Middle East tensions, though weak actual demand points to continued near-term price volatility.

[7.17 Morning Meeting Minutes] US June PPI declined 0.3% MoM, the first drop since last year, while market expectations were for a flat reading; June PPI rose 5.5% YoY, significantly narrowing from the 6.5% in May; June core PPI YoY growth slowed to 4.7%, with only a 0.2% MoM increase, both below market expectations. On July 16, the most-traded SHFE nickel contract surged in early trading, breaking through 130,000 yuan/mt and briefly hitting 133,000 yuan/mt, with a morning gain of 2.9%; LME nickel simultaneously held above $17,000/mt, rising about 2.5% in early trading. Recently, macro, policy, and cost-side positives re-emerged. Combined with a MACD golden cross, nickel prices holding above the 10-day moving average, and bearish funds taking profits, nickel prices have rebound momentum. However, weak demand and high inventory continue to cap upside room. The most-traded SHFE nickel contract is expected to trade within a 127,000–137,000 yuan/mt range. Going forward, attention will focus on the results of Indonesia's July RKAB quota approval and the situation in the Strait of Hormuz.

[7.16 Morning Meeting Minutes] US June CPI rose 3.5% YoY, compared to the expected 3.8% increase and the previous 4.2% rise. US June CPI fell 0.4% MoM, versus the expected 0.1% decline and the previous 0.5% increase. After the release of US June CPI data, traders pushed back their expectations for US Fed interest rate hikes to October. The most-traded SHFE nickel 2609 contract drifted lower in morning trading, closing down 0.43% at 128,870 yuan/mt at the end of the morning session. US inflation cooled significantly in June, with the unadjusted core CPI rising 2.6% YoY, below the expected 2.8% and the previous 2.9%. The cooling inflation further pushed back market expectations for US Fed rate hikes, and the US dollar extended its decline. In the short term, nickel prices may see a rebound, with the most-traded SHFE nickel contract price range between 127,000-133,000 yuan/mt.

[7.15 Morning Meeting Minutes] The US will blockade Iranian ports starting at 4 a.m. on the 15th; Trump stated that a 20% fee will be charged on cargo transportation and may manage the Strait of Hormuz in the future. The most-traded SHFE nickel 2609 contract surged during the night session and consolidated in the morning session, closing at 129,250 yuan/mt, with an increase of 0.43%. Over the weekend, renewed tensions in the US-Iran conflict, along with a simultaneous rise in the US dollar and crude oil, exerted pressure on metals. However, Indonesia's Ministry of Energy and Mineral Resources officially announced on July 10 that it would no longer raise overall national nickel ore mining production quotas, with increases to be very limited and strict exception approval channels set only for domestic smelters facing severe raw material supply shortages. In the short term, nickel prices may rebound, with the most-traded SHFE nickel contract price range at 127,000-133,000 yuan/mt.