SHFE Nickel To Rebound Slightly

SHANGHAI, Sep 18 (SMM) –The key focus last week was on the U.S. Labor Department's announcement that the CPI in August on a seasonally adjusted basis increased to 3.7%, surpassing both the market's earlier expectation of 3.6% and the previous reading of 3.2%. In August, inflation data came in higher than expected, but the core CPI continued to decline. As a result, there is still little expectation of a rate hike in September, but the outlook for rate cuts later in the year is less clear. Overall, the macro factors affecting nickel prices are less negative than they were, but the fact that markets are less sure of a rate cut later in the year is making it difficult for commodities to gain momentum. SHFE nickel saw a significant decline in the week ending September 15, dropping 2.36% compared to the week ending September 8. However, there was a slight uptick in trading activity in the spot market last week. From a fundamental perspective, the spot supply of pure nickel in Shanghai was relatively tight last week. This is due to the downward fluctuations in SHFE nickel prices, which have pushed nickel prices to recent lows. Additionally, with the upcoming National Day holiday, downstream demand was gearing up for pre-holiday inventory replenishment. Consequently, overall trading activity was robust last week. Jinchuan and other nickel plate shipments will arrive in Shanghai this week. Once the delivery is done, some warrants will be released back into the market. With the ongoing rise in domestic electrowinning nickel production, the overall nickel market supply is expected to increase significantly. Furthermore, the ongoing Indonesian nickel ore event has not yet been resolved, leading to tight expectations for nickel raw material supply in the fourth quarter. This sentiment continues to support nickel prices. From a cost perspective, the current support level for pure nickel raw material costs is around 159,000, and it rebounded after dropping near 159,000 on Wednesday evening last week. In summary, it is expected that nickel prices will see a slight rebound in the short term.