China: SHFE opens nickel futures to global investors, challenges LME dominance

• SHFE expands global nickel pricing role
  
  
• Nickel derivatives market liquidity likely rises
  
  

SteelDaily: China has opened its domestic nickel futures and options market to overseas investors, marking a strategic move to strengthen its role in global nickel price discovery and support raw material risk management for its stainless steel sector. The development is expected to gradually challenge the long-standing dominance of the London Metal Exchange (LME) in benchmark nickel pricing.

China's stainless steel growth drives nickel demand

China remains the world's largest stainless steel producer, with crude stainless steel output reported at 40.87 million tonnes (mnt) in 2025, accounting for around 64% of global production. Industry participants expect further growth over the next five years, supported by rising per capita stainless steel consumption and upgrading domestic demand. This is likely to keep nickel demand firm, as nearly two-thirds of global nickel consumption is linked to stainless steel production.

Supply chain security gains focus

With Indonesia controlling over 70% of global nickel production, China's heavy dependence on imported nickel units has intensified focus on supply chain security. Market participants indicated that broader access to domestic futures and options could help mills, traders and downstream users better hedge volatility and manage procurement risks.

Outlook

The internationalisation of China' nickel derivatives market may gradually reshape regional pricing dynamics, improve liquidity in Asian trade hours, and offer stainless steel producers an alternative benchmark for managing raw material exposure.

This article is published as part of a content-exchange agreement between Japan Metal Daily and BigMint.