This Week, Refined Nickel Futures Pulled Back Sharply, and Market Transactions Were Sluggish [SMM Analysis]

This Week, Refined Nickel Futures Pulled Back Significantly, With Limited Market Transactions

This week, nickel prices pulled back significantly, with spot prices fluctuating between 123,000-130,500 yuan/mt, while SHFE nickel futures prices ranged from 123,050 yuan/mt to 129,100 yuan/mt.

Starting Wednesday, refined nickel futures saw a significant pullback. On the news front, Indonesia's mining quotas may increase in the near term. According to the latest information, the approved 2025 nickel ore mining work plans and budgets (RKAB) total 298.49 million mt. Currently, Indonesia's nickel ore production accounts for 63% of global output, leading to a supply surplus in the global nickel market. Meanwhile, on the macro side, tariff policies fluctuated as Trump announced a 25% tariff on Mexico and Canada, causing market sentiment to pull back. Additionally, LME nickel inventory increased significantly. Under the influence of multiple factors, refined nickel prices pulled back sharply this week.

In terms of market transactions, as the Chinese New Year approaches, downstream enterprises have gradually entered shutdown and holiday modes, with stockpiling nearing completion. Spot market transactions were sluggish, and overall market demand slowed. From the supply side, although some enterprises slightly reduced refined nickel production in January, the overall operating rate remained high, and supply was still sufficient.

Regarding spot premiums/discounts, as of this Friday, January 24, Jinchuan brand premiums/discounts ranged from 1,900 yuan/mt to 2,400 yuan/mt, with an average level of 2,150 yuan/mt. Amid reduced shipments, premiums/discounts fluctuated slightly at low levels this week.

In summary, there has been no significant short-term improvement in fundamentals. With a supply surplus, nickel prices are expected to continue fluctuating widely in the short term. Post-holiday, spot nickel prices are expected to range between 122,300-128,700 yuan/mt, while futures prices are expected to range between 122,500-126,500 yuan/mt.

No Change in Bonded Zone Inventory This Week

According to the latest survey data from SMM, nickel inventory in the bonded zone this week stood at 5,400 mt, unchanged WoW.

Inventory:
This week, SMM's six-region inventory totaled 41,273 mt, an increase of 1,124 mt WoW. During the week, nickel prices pulled back significantly. As the Chinese New Year approaches, overall downstream transactions were sluggish. Domestic spot premiums/discounts fluctuated slightly at low levels.