Global Tensions Weigh on Nickel and Stainless Steel: Prices Slip as Markets Turn Defensive

LME nickel closed down $135 at $15,115/ton yesterday; SHFE nickel futures closed down 280 yuan at 120,620 yuan/ton last night.

On the macro front, regarding Sino-foreign relations, US Treasury Secretary Bessenter stated that if China continues to block rare earth exports, the US may impose additional tariffs on China. The Ministry of Foreign Affairs responded that the results of the China-US trade consultations in Kuala Lumpur fully demonstrate that dialogue and cooperation are the correct approach, and threats and pressure are not conducive to solving problems. China-EU export control dialogue was held in Brussels, with both sides conducting in-depth and constructive communication on mutual concerns in the area of export controls. Both sides agreed to continue communication and exchanges to promote the stability and smooth operation of the China-EU industrial and supply chains. A spokesperson for the Ministry of Foreign Affairs announced that China has decided to extend the visa-free policy for 45 countries, including France and Germany, until December 31, 2026; to include Sweden in the visa-free policy until December 31 next year; and to resume group tours for Chinese citizens to Canada.

The stock market saw a rebound with reduced trading volume, and the current market is in a phase of rapid rotation, making trading more difficult. The overall adjustment is not yet sufficient. In the short term, stock index futures can be considered for hedging. After the adjustment is completed, the market will continue to rise.

Yesterday, stainless steel futures opened with a false rise before plunging and falling below key levels. They recovered in the afternoon but fell again in the evening. The spot market followed the futures plunge, coupled with Tsingshan's withdrawal of price control, allowing agents to freely lower prices. The market went from observing to having no choice but to follow the decline, resulting in a price drop, but trading volume was weak.