[SMM Weekly Nickel Review] Nickel prices broke through the support level and fell below 120,000 yuan/mt again this week, with the risk of nickel price decline remaining amidst the volatile macro environment.

This week, nickel prices showed a downward trend. In the spot market, the average price of SMM1# refined nickel fell from 123,900 yuan/mt at the beginning of the week to 121,500 yuan/mt, a decline of 1.9%. The premium for Jinchuan nickel remained in the range of 2,300-2,600 yuan/mt this week, showing no significant change compared to last week. Currently, downstream procurement is still mainly driven by immediate needs, with low enthusiasm for purchasing, resulting in generally average trading activity in the spot market. In the futures market, the most-traded SHFE nickel contract (NI2507) closed at 119,920 yuan/mt this week, down 1.82%, with prices once again falling below the key point of 120,000 yuan/mt. LME nickel prices fell more sharply than SHFE nickel prices this week, closing at $15,120/mt, down 2.39%.

On the macro front, the US May non-farm payrolls data significantly exceeded expectations (with an increase of 272,000 jobs), coupled with the US Fed's June interest rate decision signaling a more "hawkish" stance, weakening expectations for US Fed interest rate cuts. The risk of escalating trade tariffs has intensified, with the US announcing the imposition of additional tariffs on steel home appliances (such as washing machines and refrigerators) starting from June 23, impacting nickel end-use demand in sectors like stainless steel and electroplating. The geopolitical conflict in the Middle East has sharply escalated, driving up crude oil and gold prices, prompting a shift towards safe-haven assets and accelerating the decline in nickel prices.

In terms of inventory, the inventory in the Shanghai Bonded Zone was approximately 5,000 mt this week, unchanged WoW.

Domestic social inventory was approximately 39,400 mt, with an inventory buildup of about 8 mt WoW, maintaining a stable inventory situation.

This week, the nickel market broke below key levels under the dual impact of macroeconomic pressures and fundamental supply surpluses. In the absence of unexpected demand improvements or significant supply-side contractions, nickel prices are unlikely to break out of the current doldrums, with downside risks still present. It is expected that in the short term, the bottom of the nickel price range will be around 115,000 yuan, while the top will face pressure at 123,000 yuan.