【SMM Analysis】Nickel prices continued to fluctuate this week, with inventory remaining at a high level.

This week, nickel prices continued the volatile trend since mid-April. The average price of SMM1# refined nickel was 126,850 yuan/mt, up 0.5% WoW. LME nickel futures prices fluctuated rangebound around $15,600-15,800/mt. Expectations for a US Fed interest rate hike in June intensified, putting pressure on LME nickel prices denominated in US dollars. Risk-averse sentiment was evident, and the tug-of-war between longs and shorts in the market intensified.

In terms of supply, the Indonesian president signed a policy to increase nickel ore royalty fees, which will take effect on April 26. Local ore prices remain relatively high, and rising costs provided some support for nickel prices. Domestic refined nickel operating rates remained high. Demand side, downstream alloy demand was weak this week, mainly due to the significant decline in nickel prices caused by reciprocal tariff policies earlier. Most companies had already stockpiled in advance, leading to low spot refined nickel transactions at month-end. Inventory side, Shanghai Bonded Zone inventory was around 5,800 mt, flat WoW. Domestic social inventory was approximately 44,700 mt, with a buildup of about 701 mt WoW. Inventories remained at relatively high levels, somewhat limiting the upside room for nickel prices.