This week, nickel prices showed a pattern of consolidation and rebound with the center shifting higher. US June CPI and PPI both cooled more than expected, significantly easing market concerns over Fed rate hikes, and the US dollar index fell to a three-week low. At the industry level, Indonesia’s Ministry of Energy and Mineral Resources made it clear that it would not raise nickel ore quotas across the board, only making limited additions for smelters facing raw material shortages, fully correcting the market’s previously priced-in expectations of significantly looser quotas. Meanwhile, the US-Iran conflict continued to escalate, disrupting shipping through the Strait of Hormuz, while risks of sulfur supply disruptions remained. Driven by these three bullish factors, the most-traded SHFE nickel contract broke through the 130,000 yuan/mt mark on July 16, touching 133,000 yuan/mt intraday, while LME nickel concurrently climbed above $17,000/mt and hit a more than three-week high. In the spot market, the SMM #1 refined nickel averaged 129,710 yuan/mt this week, up 1,150 yuan/mt WoW. The Jinchuan refined nickel premium weakened this week, falling to 2,000 yuan/mt, while mainstream electrodeposited nickel discounts were in the range of -300 to -500 yuan/mt. Pressured by rebounding futures prices and the downstream entering the high-temperature off-season, spot transactions were poor this week, and the market was sluggish. On the macro front, in the US, the June CPI eased to 3.5% YoY (prev. 4.2%), and core CPI to 2.6% YoY (prev. 3.3%), both coming in below expectations. The June PPI fell 0.3% MoM, turning negative for the first time this year. After the data release, market expectations for Fed rate hikes were pushed back to October, and the US dollar index weakened under pressure. The US-Iran conflict continued to heat up this week. The US blockaded Iranian ports from July 15, Iran announced the Strait of Hormuz would be “indefinitely closed,” and the Houthis threatened to block the Bab el-Mandeb Strait. Shipping through Hormuz fell sharply, and risks of sulfur supply disruptions continued to grow. In China, GDP grew 4.7% YoY in H1, and in Q2 grew 4.3% YoY and 0.9% QoQ. The central bank said it would step up counter-cyclical and cross-cyclical adjustments to consolidate the positive momentum of stable economic growth. China’s macro policies remained supportive, providing a floor for the commodity market. On the inventory front, on the inventory front, this week, Shanghai bonded zone inventory was around 1,700 mt, flat WoW. China’s social inventory was about 128,000 mt, up 1,600 mt WoW in inventory buildup. From the weekly average price perspective, the nickel price center shifted higher this week, but the sharp pullback on Friday indicates strong resistance above 130,000 yuan/mt. Without fresh bullish catalysts, nickel prices are expected to return to the 125,000–130,000 yuan/mt range and consolidate.

On July 16, SMM reported aluminum inventory in the Shanghai Bonded Zone at 76,100 mt, Guangdong Bonded Zone 13,500 mt, totaling 89,600 mt, down 3,900 mt WoW.

Nickel prices continued to consolidate at lows this week. Early week, boosted by weaker-than-expected US June non-farm payrolls data and a weaker US dollar, SHFE nickel once surged to around 128,000 yuan/mt. Mid-week, the US dollar index rebounded, weighing on nickel prices and causing a pullback. Late week, driven by a marginal recovery in macro sentiment, SHFE and LME nickel prices rebounded in tandem. Over the whole week, the nickel price center edged up slightly WoW but failed to achieve an effective breakout. In the spot market, the average price of SMM #1 refined nickel was 127,770 yuan/mt, up 500 yuan/mt WoW. The Jinchuan nickel premium remained stable at 2,300 yuan/mt this week, while discounts for mainstream electrodeposited nickel were in the range of -400 to 400 yuan/mt. Spot trading was relatively active as prices continued to consolidate at low levels, with strong downstream sentiment for point-price purchases. On the macro front, US June non-farm payrolls data significantly missed expectations, which cooled market expectations for US Fed interest rate hikes and weakened the US dollar. Subsequently, the market entered a wait-and-see period ahead of the Fed's July FOMC meeting, with limited willingness for capital participation, preventing nickel prices from achieving an effective breakout. Geopolitically, US-Iran tensions escalated again this week. US officials stated that Iran recently fired on three commercial ships in the Strait of Hormuz, the US Treasury revoked exemptions for Iranian oil sales, and the US military launched strong strikes against Iran. Navigation risks in Hormuz increased again, and Iran was reported to have shipped out over 10 million barrels of crude oil within 24 hours. Although Trump stated he did not believe war would break out again, the conflict continued to spill over. On the inventory front, Shanghai bonded zone inventory stood at around 1,700 mt this week, destocking 1,000 mt WoW. Social inventory in China was about 126,000 mt, destocking roughly 4,000 mt WoW. Given the sustained drop in nickel prices recently, a sentiment-driven repair rebound is expected next week. However, market expectations for quota replenishment in H2 continue to brew, limiting upside room. The most-traded SHFE nickel contract is expected to trade in a core range of 127,000-133,000 yuan/mt next week.

This week (July 6 – July 9), the weekly average price range for Yangshan copper premium B/L transactions was $73–$87/mt, QP August, with an average price of $80/mt; the weekly average price range for warrant transactions was $74–$85/mt, QP August, with an average price of $80/mt; and EQ copper CIF B/L was at $43–$54/mt, QP August, with an average price of $49/mt. As of July 9, the forex-adjusted SHFE/LME copper price ratio for the SHFE copper 2607 contract against LME copper was 1.1406, with an import profit near 200.22 yuan/mt, compared to a loss of 163.35 yuan/mt in the previous period, with the arbitrage window open. As of Thursday, the front-end contango structure of LME copper widened, with the carry spread between the July date and August date at −$42.98/mt. Currently, mainstream offers for high-quality ER copper warrants are around $90–$100/mt, and mainstream offers for B/L are around $90–$100/mt; CIF B/L EQ copper traded around $50–$60/mt. This week, Yangshan copper premiums showed a rapid uptrend. The logic remained: low port arrivals from July to August led to persistently tight supply, giving suppliers strong sentiment to hold back from selling and hold prices firm, significantly lifting market offers and transaction centers. On the SHFE/LME price ratio side, the import price ratio swung from a loss to a profit, and downstream restocking actions occurred due to a typhoon. However, the rapid rise in premiums has caused current divergence between upstream and downstream players. Overall, limited available cargo, tight supply, and an open arbitrage window were the core drivers of this round's premium rise. According to the SMM survey, as of Thursday this week (July 9), China's bonded zone copper inventory decreased by about 4,400 mt MoM from the previous period (July 2) to 35,300 mt. Inventory in the Shanghai bonded zone was down 3,900 mt MoM to 31,900 mt, and in the Guangdong bonded zone, it was down 500 mt MoM to 3,400 mt. Bonded zone inventory destocked for a third consecutive week, consistent with shrinking port arrivals and tightening available cargo; the destocking pace widened from last week (a 1,300 mt decline), mainly due to low restocking into the bonded zone. Looking ahead, the pattern of tight arrivals from July to August continues to materialize, and supply-side support for premiums is likely to persist. Coupled with a rising import price ratio and a far-end shift to a backwardation structure, this is expected to continue giving suppliers confidence to hold prices firm. However, attention should be paid to whether current downstream actual consumption demand can support the sustained rise in premiums.

This week, nickel prices experienced a sharp drop triggered by macro tightening expectations and a supply-side policy reversal. At the beginning of the week, nickel prices were still trading around 136,000 yuan/mt, but were subsequently pressured by a steadily rising US dollar index and higher US Treasury yields, which weighed on base metals prices. Adding to this, market rumors that Indonesia would significantly increase its full-year RKAB nickel ore quota reversed the previous supply contraction narrative of "quota tightening." Under the dual impact of macro and policy shocks, nickel prices fell below multiple support levels, including 130,000 and 127,000 yuan/mt. As of Friday, the cumulative weekly decline was nearly 6%, marking the largest weekly drop in recent months; LME nickel dropped to $16,700/mt, with a weekly loss of about 5%. In the spot market, the average price of SMM #1 refined nickel this week was 131,600 yuan/mt, down 8,250 yuan/mt WoW. The premium for Jinchuan nickel remained stable at 1,300-1,500 yuan/mt, while mainstream electrodeposited nickel discounts were in the -400 to -300 yuan/mt range. Affected by the steep decline in futures prices this week, downstream point-price activity was active and trading improved. On the macro front, the biggest headwind this week came from the strong hawkish signal sent by the US Fed's June FOMC meeting. On June 18, the Fed left its benchmark interest rate unchanged at 3.50%-3.75%, marking the fourth consecutive pause in interest rate cuts. The Fed's Summary of Economic Projections raised the median forecast for the federal funds rate in 2026 to 3.8% from 3.4% in March. This hawkish pivot boosted the US dollar index and pushed US Treasury yields higher, exerting significant pressure on base metals. Domestically, China's LPR quotes on June 22 remained unchanged, with the 1-year LPR at 3.0% and the 5-year and above LPR at 3.5%, continuing expectations of pro-growth policies. On the inventory front, Shanghai bonded zone inventory this week stood at about 2,700 mt, flat WoW. China's social inventory was approximately 129,000 mt, up 2,700 mt WoW. Nickel prices are currently under triple pressure from an abrupt shift in policy expectations, resonance of macro headwinds, and persistently high inventory overhang. The most-traded SHFE nickel contract is expected to trade in a core range of 125,000-135,000 yuan/mt next week.

Nickel prices showed a pattern of stopping falling and stabilizing with a fluctuating rebound this week. At the start of the week, the US-Iran peace agreement became the key variable reversing market sentiment; as the geopolitical risk premium rapidly faded, market risk appetite recovered significantly. Meanwhile, the US Fed kept rates unchanged at its June FOMC meeting, in line with market expectations. Driven by the macro sentiment recovery, SHFE and LME nickel prices rose from earlier lows amid fluctuations. The most-traded SHFE nickel contract rebounded from the 135,000 yuan/mt area to near 137,000 yuan/mt, and LME nickel rallied in tandem to above $17,900/mt. This week, the SMM #1 refined nickel average price was 136,112 yuan/mt, up 450 yuan/mt WoW. Jinchuan nickel premiums stabilized at 1,300–1,500 yuan/mt, while mainstream electrodeposited nickel discounts were in the -500 to -400 yuan/mt range. Spot trading activity weakened from the previous week, as the futures price rebound and the completion of purchasing by most end-users left downstream parties largely on the sidelines. On the macro front, the most positive change this week came from the breakthrough in US-Iran relations. The US and Iran reached a peace agreement, and the Strait of Hormuz is expected to fully resume navigation in the near term, a geopolitical positive that boosted risk appetite. Some media outlets reported that the agreement would be officially signed on June 19, after which the Strait of Hormuz would fully reopen. On June 18 Beijing time, the US Fed kept the benchmark interest rate unchanged at 3.50%–3.75%, marking the fourth consecutive pause in rate cuts. The Fed held its FOMC meeting on June 16-17, and the market had previously priced in a 98.5% probability of an unchanged rate. However, the hawkish signals from this meeting cannot be ignored. The new chair, Warsh, leaned hawkish, and the dot plot showed that half of officials expected at least one rate hike this year. Inventory side, Shanghai Bonded Zone inventory was around 2,700 mt this week, building up by 1,000 mt WoW. China’s social inventory stood at about 126,000 mt, with a slight destocking of roughly 86 mt WoW. Following the US-Iran agreement, expectations of sulfur supply recovery intensified, weakening the cost-support logic. With refined nickel inventories continuing to build up both in and outside China, upside resistance for nickel prices is clear. The most-traded SHFE nickel contract is expected to trade in a core range of 130,000–138,000 yuan/mt.