[SMM Analysis] Price Review of Refined Nickel During the Labour Day Holiday: Price Fluctuations Dominated by Macroeconomic Factors

During the Labour Day holiday, LME nickel prices exhibited a trend of initial weakness followed by strength: On April 30, the closing price of LME nickel was $15,330/mt. Subsequently, prices dropped slightly on May 1, but rebounded significantly on May 2, with intraday prices surging to a high of $15,630/mt. The final closing price was $15,430/mt, marking a 1.31% increase.

Macro Factors:

1. During the Labour Day holiday, US economic data had a significant impact on the market. Data released by the US Department of Commerce on April 30 showed that the US GDP contracted by 0.3% on an annualized basis QoQ in Q1 2025, triggering market pessimism on the same day and causing LME nickel prices to fall.

2. On May 2 local time, the US Bureau of Labor Statistics released the US non-farm payrolls data for April 2025. The seasonally adjusted non-farm payrolls in the US increased by 177,000 in April, exceeding the expected 138,000. Meanwhile, the non-farm payrolls for March and February were revised down by 43,000 and 15,000, respectively. The unemployment rate in April remained at 4.2%, in line with expectations. Although the growth in US non-farm payrolls in April slowed compared to the previous month, it still exceeded expectations. Following the release of the non-farm data, US stocks rose, US bond yields increased, the US dollar index reversed gains to losses, and LME nickel prices rebounded significantly.

Fundamental Factors:

Supply side, SMM refined nickel production in China increased by 6% MoM and 47% YoY in April 2025, with a cumulative YoY growth of 30%. The operating rate of domestic refined nickel enterprises reached 67%. In April, the operating rate of top-tier enterprises remained high, with a stable production pace. Demand side, electroplating alloy demand remained stable, with downstream buying the dip supporting rigid demand. However, spot refined nickel transactions were at a low level at month-end.

Inventory Factors:

Before the holiday, the inventory in the Shanghai Bonded Zone was approximately 6,100 mt, with an inventory buildup of 300 mt MoM. Domestic social inventory was approximately 44,100 mt, with a destocking of about 560 mt MoM. As of May 2, LME nickel inventory stood at 200,418 mt, a decrease of 1,513 mt from the previous trading day. Overall inventory remained at a high level.