Nickel prices retreated after a rapid rise this week. Early in the week, driven by macro tailwinds from a weaker US dollar index and high market sentiment in the nonferrous metals sector, nickel prices hit new highs, with the most-traded SHFE nickel contract rising to 152,500 yuan/mt and LME nickel climbing to $19,160/mt. However, on Friday, both macro sentiment and capital flows cooled significantly, leading to a sharp pullback in nickel prices. By Friday's close, the most-traded SHFE nickel contract settled at 140,000 yuan/mt, down 3.8% WoW, while LME nickel fell 4.3% WoW. In the spot market, the average price of SMM #1 refined nickel was 148,430 yuan/mt this week, down 2,400 yuan/mt WoW. The average premium for Jinchuan nickel averaged 6,800 yuan/mt, down 1,000 yuan/mt WoW. The premiums and discounts for mainstream domestic electrodeposited nickel ranged from -500 to 400 yuan/mt, showing a notable decline WoW. Overall spot trading was muted this week, as most end-users had completed their pre-holiday stockpiling.
On the macro front, the US Fed paused rate hikes in its January meeting, keeping rates at 3.5-3.75%, while Trump announced he would name the next Fed Chairman next week. China and the UK achieved a series of positive outcomes during UK Prime Minister Starmer's visit to China. Domestically, China's GDP exceeded 140 trillion yuan in 2025, up 5.0% YoY, meeting expectations, with Q4 growth up 4.5% YoY. In the short term, speculative sentiment showed signs of fading, and nickel prices are expected to undergo a phased correction next week, with the most-traded SHFE nickel contract likely trading between 130,000 and 145,000 yuan/mt.
Inventory side, Shanghai Bonded Zone inventory stood at around 1,700 mt this week, down 500 mt WoW.
Domestic social inventory was about 71,000 mt, with an inventory buildup of roughly 4,300 mt WoW.
![[SMM Flash]](https://imgqn.smm.cn/usercenter/WNjzM20251217171732.jpeg)
