Abstract The monthly summary of metal prices in May reveals that nickel was particularly volatile, mainly influenced by short selling and the U.S. dollar index. As we move into June, a rebound in nickel prices is anticipated, with the main trading range expected to be between 15,000 and 16,000 USD/ton. This trend is likely driven by key events such as the China Urbanization Conference in mid-June and the upcoming FOMC meeting on June 19–20.
January and May Nickel Price Trends
1. LME Nickel Prices in May
Starting from around $18,800/ton in February, the price of LME nickel dropped significantly to $15,100/ton at the end of April, marking a nearly 20% decline. At the beginning of May, it fell further to nearly $15,000/ton before stabilizing in a narrow range. The monthly trading range for LME nickel was between 14,561 and 15,406 USD/ton, with a fluctuation of less than $1,000/ton.
Despite the overall stability in global macroeconomic conditions, the U.S. economy continued its steady recovery, while China’s economic recovery remained weak. Meanwhile, the Eurozone faced stagnation risks, and there were no major changes in economic performance. Stock markets in Europe and the U.S. continued to rise, but the U.S. dollar index showed a strong upward trend.
Throughout May, the metal market was heavily influenced by short positions against the U.S. dollar index. A significant amount of profit had been accumulated, and concerns about Chinese companies buying during dips added pressure. However, the short positions eventually triggered a rebound in metal prices, especially for copper. On the other hand, the surge in the U.S. dollar index negatively impacted the market.
In line with the low nickel prices, LME nickel inventories increased sharply in May, reaching over 180,000 tons, up by 3,500 tons for the month. Although this was a record high, the rate of increase slowed down compared to previous months.
2. Domestic Spot Nickel Market in May
With LME nickel prices remaining low, Jinchuan nickel plate ex-factory prices saw fewer adjustments. The price dropped to 14,500 yuan/ton, down by 3,500 yuan/ton. In the Shanghai market, Jinchuan nickel traded between 104,300 and 108,000 yuan/ton, while Russian nickel ranged between 103,300 and 107,000 yuan/ton, with a spread of about 3,500 yuan/ton.
At the start of the month, Jinchuan nickel in Shanghai fell to around 104,500 yuan/ton. Following a slight rebound in LME prices, it reached a monthly high of 108,000 yuan/ton. From mid-month to the end of the month, it mostly traded between 105,000 and 106,000 yuan/ton. Russian nickel followed a similar pattern, with a consistent price difference of about 1,000 yuan/ton.
According to customs data, China imported 148,300 tons of unwrought nickel in April, continuing a moderate growth trend since February. Due to a low base last year, the year-on-year increase was significant. Domestic electrolytic nickel production remained stable, and demand from downstream stainless steel plants did not change much. Overall, the domestic electrolytic nickel market remained well-supplied.
Second, the Operation Status of Nickel Pig Iron and Laterite Nickel Ore Markets in May
The domestic nickel pig iron prices remained low throughout May, following the LME nickel price movements. The commissioning of new rotary kiln projects increased supply and reduced production costs. By the second half of the month, nickel pig iron prices weakened further as stainless steel mills reduced their bids.
At the start of May, laterite nickel ore prices followed the LME nickel trend and remained relatively stable. Customs data shows that imports of laterite nickel ore in April reached 49.3 million tons, a drop from March’s 55.28 million tons, but still higher than the 47.94 million tons recorded in the same period last year. By the week of May 17, port inventories of laterite nickel ore nationwide rose to 21.4 million tons, then declined slightly to around 21 million tons by the end of the month.
Third, the Trend of Nickel Prices in May
After a month of volatility, we are cautiously optimistic about the nickel price outlook for June. We expect a clear upward trend, with the main trading range likely to be between 15,000 and 16,000 USD/ton. Under the backdrop of stable macroeconomic conditions, two key factors are expected to drive metal prices in June:
First, the dynamics surrounding China's urbanization policy and market expectations for its development. While the weak recovery of the Chinese economy continues, it is increasingly recognized by investors. Although large-scale stimulus plans are no longer expected, there is growing anticipation for specific measures related to new urbanization, particularly in the context of economic reforms. These reforms may not directly boost metal demand, but they could shift market risk appetite and support higher-risk assets.
Second, the expectations surrounding the Fed’s June 19–20 FOMC meeting. Stronger economic data and rising stock markets have boosted confidence in the U.S. economy. This has led to increased speculation about potential shifts in monetary policy. Some analysts worry that the Fed might adjust its asset purchase program in the third quarter. However, we believe the Fed will not provide a clear timeline for any changes in June, and its cautious stance may offer some support to the market.
January and May Nickel Price Trends
1. LME Nickel Prices in May
Starting from around $18,800/ton in February, the price of LME nickel dropped significantly to $15,100/ton at the end of April, marking a nearly 20% decline. At the beginning of May, it fell further to nearly $15,000/ton before stabilizing in a narrow range. The monthly trading range for LME nickel was between 14,561 and 15,406 USD/ton, with a fluctuation of less than $1,000/ton.
Despite the overall stability in global macroeconomic conditions, the U.S. economy continued its steady recovery, while China’s economic recovery remained weak. Meanwhile, the Eurozone faced stagnation risks, and there were no major changes in economic performance. Stock markets in Europe and the U.S. continued to rise, but the U.S. dollar index showed a strong upward trend.
Throughout May, the metal market was heavily influenced by short positions against the U.S. dollar index. A significant amount of profit had been accumulated, and concerns about Chinese companies buying during dips added pressure. However, the short positions eventually triggered a rebound in metal prices, especially for copper. On the other hand, the surge in the U.S. dollar index negatively impacted the market.
In line with the low nickel prices, LME nickel inventories increased sharply in May, reaching over 180,000 tons, up by 3,500 tons for the month. Although this was a record high, the rate of increase slowed down compared to previous months.
2. Domestic Spot Nickel Market in May
With LME nickel prices remaining low, Jinchuan nickel plate ex-factory prices saw fewer adjustments. The price dropped to 14,500 yuan/ton, down by 3,500 yuan/ton. In the Shanghai market, Jinchuan nickel traded between 104,300 and 108,000 yuan/ton, while Russian nickel ranged between 103,300 and 107,000 yuan/ton, with a spread of about 3,500 yuan/ton.
At the start of the month, Jinchuan nickel in Shanghai fell to around 104,500 yuan/ton. Following a slight rebound in LME prices, it reached a monthly high of 108,000 yuan/ton. From mid-month to the end of the month, it mostly traded between 105,000 and 106,000 yuan/ton. Russian nickel followed a similar pattern, with a consistent price difference of about 1,000 yuan/ton.
According to customs data, China imported 148,300 tons of unwrought nickel in April, continuing a moderate growth trend since February. Due to a low base last year, the year-on-year increase was significant. Domestic electrolytic nickel production remained stable, and demand from downstream stainless steel plants did not change much. Overall, the domestic electrolytic nickel market remained well-supplied.
Second, the Operation Status of Nickel Pig Iron and Laterite Nickel Ore Markets in May
The domestic nickel pig iron prices remained low throughout May, following the LME nickel price movements. The commissioning of new rotary kiln projects increased supply and reduced production costs. By the second half of the month, nickel pig iron prices weakened further as stainless steel mills reduced their bids.
At the start of May, laterite nickel ore prices followed the LME nickel trend and remained relatively stable. Customs data shows that imports of laterite nickel ore in April reached 49.3 million tons, a drop from March’s 55.28 million tons, but still higher than the 47.94 million tons recorded in the same period last year. By the week of May 17, port inventories of laterite nickel ore nationwide rose to 21.4 million tons, then declined slightly to around 21 million tons by the end of the month.
Third, the Trend of Nickel Prices in May
After a month of volatility, we are cautiously optimistic about the nickel price outlook for June. We expect a clear upward trend, with the main trading range likely to be between 15,000 and 16,000 USD/ton. Under the backdrop of stable macroeconomic conditions, two key factors are expected to drive metal prices in June:
First, the dynamics surrounding China's urbanization policy and market expectations for its development. While the weak recovery of the Chinese economy continues, it is increasingly recognized by investors. Although large-scale stimulus plans are no longer expected, there is growing anticipation for specific measures related to new urbanization, particularly in the context of economic reforms. These reforms may not directly boost metal demand, but they could shift market risk appetite and support higher-risk assets.
Second, the expectations surrounding the Fed’s June 19–20 FOMC meeting. Stronger economic data and rising stock markets have boosted confidence in the U.S. economy. This has led to increased speculation about potential shifts in monetary policy. Some analysts worry that the Fed might adjust its asset purchase program in the third quarter. However, we believe the Fed will not provide a clear timeline for any changes in June, and its cautious stance may offer some support to the market.
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