SHFE nickel dropped ¥2,900 to ¥146,450/mt on June 22 — a 1.94% decline that made it the worst performer on the SHFE board. The sell-off was driven by news that major Chinese stainless steel mills, including Tsingshan and TISCO, are planning 3–5% production cuts for Q3 in response to softening export orders from Europe and Southeast Asia.
Stainless steel accounts for roughly 65% of global nickel demand, and China produces over 60% of the world's stainless. When Chinese mills cut output, nickel demand falls directly — there's no offsetting consumer. The export order weakness is tied to an inventory overhang in European stainless distributors: after restocking aggressively in Q4 2025 and Q1 2026, distributors are now destocking, which flows upstream to reduced Chinese mill orders.
The battery sector provides a partial offset. Chinese nickel sulfate production rose 22% year-on-year in May, driven by continued EV battery demand. But battery-grade nickel (nickel sulfate) accounted for just 18% of total nickel consumption in 2025 — it's growing fast but from a small base. The stainless steel slowdown outweighs the battery growth in tonnage terms by roughly 3:1. NPI prices in China have slipped to ¥1,080 per nickel unit, the lowest since December 2025.
Chinese stainless mill cuts mean more nickel supply will chase non-stainless buyers — and that includes you. If you're buying nickel units for alloying, plating, or foundry applications, now is the time to negotiate Q3 contracts. The 3–5% cut in stainless output frees up roughly 25,000–40,000 tons of nickel demand per quarter. That metal needs to find a home. Ask suppliers for fixed-price Q3 contracts at $17,400–$17,600/mt. If they resist, point to the LME stock trend (up 380% since 2023) and Indonesian production trajectory. Nickel is not tight, and your supplier knows it.