This week, nickel prices showed a pattern of consolidation and rebound with the center shifting higher. US June CPI and PPI both cooled more than expected, significantly easing market concerns over Fed rate hikes, and the US dollar index fell to a three-week low. At the industry level, Indonesia’s Ministry of Energy and Mineral Resources made it clear that it would not raise nickel ore quotas across the board, only making limited additions for smelters facing raw material shortages, fully correcting the market’s previously priced-in expectations of significantly looser quotas. Meanwhile, the US-Iran conflict continued to escalate, disrupting shipping through the Strait of Hormuz, while risks of sulfur supply disruptions remained. Driven by these three bullish factors, the most-traded SHFE nickel contract broke through the 130,000 yuan/mt mark on July 16, touching 133,000 yuan/mt intraday, while LME nickel concurrently climbed above $17,000/mt and hit a more than three-week high. In the spot market, the SMM #1 refined nickel averaged 129,710 yuan/mt this week, up 1,150 yuan/mt WoW. The Jinchuan refined nickel premium weakened this week, falling to 2,000 yuan/mt, while mainstream electrodeposited nickel discounts were in the range of -300 to -500 yuan/mt. Pressured by rebounding futures prices and the downstream entering the high-temperature off-season, spot transactions were poor this week, and the market was sluggish.
On the macro front, in the US, the June CPI eased to 3.5% YoY (prev. 4.2%), and core CPI to 2.6% YoY (prev. 3.3%), both coming in below expectations. The June PPI fell 0.3% MoM, turning negative for the first time this year. After the data release, market expectations for Fed rate hikes were pushed back to October, and the US dollar index weakened under pressure. The US-Iran conflict continued to heat up this week. The US blockaded Iranian ports from July 15, Iran announced the Strait of Hormuz would be “indefinitely closed,” and the Houthis threatened to block the Bab el-Mandeb Strait. Shipping through Hormuz fell sharply, and risks of sulfur supply disruptions continued to grow. In China, GDP grew 4.7% YoY in H1, and in Q2 grew 4.3% YoY and 0.9% QoQ. The central bank said it would step up counter-cyclical and cross-cyclical adjustments to consolidate the positive momentum of stable economic growth. China’s macro policies remained supportive, providing a floor for the commodity market.
On the inventory front, on the inventory front, this week, Shanghai bonded zone inventory was around 1,700 mt, flat WoW. China’s social inventory was about 128,000 mt, up 1,600 mt WoW in inventory buildup.
From the weekly average price perspective, the nickel price center shifted higher this week, but the sharp pullback on Friday indicates strong resistance above 130,000 yuan/mt. Without fresh bullish catalysts, nickel prices are expected to return to the 125,000–130,000 yuan/mt range and consolidate.
![[SMM Analysis] Downstream demand is weak, and intermediate product payables are under pressure.](https://imgqn.smm.cn/usercenter/vcoVV20251217171732.jpeg)
