Shanghai nickel futures’ benchmark contract drops more than 3% in trading

Shanghai nickel futures’ benchmark contract fell more than 3% in trading on June 3, 2026, closing at 18,683 USD/T, down 0.25% from the previous day. The decline marked a 4.85% drop over the past month, remaining 20.96% higher than a year ago. The price movement reflected a mix of near-term supply-side pressures and cautious demand conditions.

Supply constraints, including declining LME nickel inventories and mining disruptions such as Zimbabwe’s export restrictions, had previously supported prices. However, recent developments, such as softer nickel ore prices in the Philippines and easing nickel sulfate prices, have reduced near-term cost support. Additionally, Indonesia’s rotational maintenance at the Weda Bay Industrial Park and reduced nickel pig iron (NPI) production have contributed to tighter supply conditions.

On the demand side, China’s manufacturing PMI remained at the expansion threshold of 50.0 in May, indicating stable but not robust growth. While the electric vehicle sector continues to support long-term nickel consumption, immediate demand has remained subdued, with procurement activity in China largely driven by essential needs.

Looking ahead, analysts expect nickel to trade at 19,082.31 USD/MT by the end of the quarter and 20,477.09 USD/MT in 12 months. Despite short-term volatility, underlying supply concerns, particularly in Indonesia, continue to provide a floor for prices.