[SMM Weekly Nickel Review] Nickel prices "dipped first, then rose," with the contradiction between cost support and supply surplus remaining unresolved

This week, nickel prices experienced a "decline followed by a rebound," but maintained an overall downward trend. Early in the week, nickel prices came under pressure, with the most-traded SHFE nickel contract (NI2507) dropping to a low of 118,050 yuan/mt, and the SMM 1# refined nickel average spot price pulling back synchronously to 119,825 yuan/mt. Prices stabilized and rebounded mid-week, with the average spot price rising to 120,625 yuan/mt as macro pressures were released in stages. The most-traded SHFE nickel contract closed the week at 118,280 yuan/mt, down 1.46% WoW, while LME nickel closed at $15,095/mt, down 0.7% WoW. In terms of spot premiums/discounts, Jinchuan nickel premiums remained in the 2,500-2,700 yuan/mt range this week, while domestic mainstream electrodeposited nickel premiums stayed in the 0-400 yuan/mt range. In the short term, the contradiction between cost support and supply surplus is difficult to resolve fundamentally, and nickel prices are expected to continue fluctuating rangebound within the 118,000-123,000 yuan/mt range.

On the macro front, the June meeting maintained the benchmark interest rate unchanged at 4.25%-4.50%, with the dot plot signaling a hawkish stance of only two interest rate cuts in 2025 and an expected cut of just 25 basis points in 2026. Powell explicitly stated that "inflation is slightly above the 2% target" and anticipated "tariff-driven inflation increases." The ongoing tensions in the Middle East (Israel closing airspace, Iran on air defense alert) have driven up crude oil and gold prices while exacerbating risk-averse sentiment in the industrial metals market.

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

Domestic social inventory was approximately 38,200 mt, with destocking of 1,160 mt WoW. Inventory levels decreased slightly.