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This week, nickel prices first declined and then rebounded. The most-traded SHFE nickel contract (NI2508) fluctuated rangebound around the key price level of 120,000 yuan/mt, closing at 120,500 yuan/mt on Friday, with a weekly decline of 0.57%. At the beginning of the week, affected by Trump's tariff threats and a stronger US dollar, the most-traded SHFE nickel contract opened low at 119,270 yuan/mt on Monday, with LME nickel also declining to $15,065/mt. Mid-week, macro sentiment improved, and short covering pushed the most-traded SHFE nickel contract price to rebound, reaching a high of 121,670 yuan/mt. In the spot market, the average price of SMM 1# refined nickel was reported at 121,240 yuan/mt, with a weekly increase of 40 yuan/mt. The premium of Jinchuan nickel remained stable at 1,900-2,100 yuan/mt, with an average weekly decrease of 10 yuan/mt. The premium range of mainstream electrodeposited nickel in China remained stable at -100-300 yuan/mt this week, unchanged from last week.
From a macro perspective, tariff threats intensified again. US President Trump announced that starting from August 1, tariffs would be imposed on over 150 countries, including Japan, at rates of 25%-40%. Meanwhile, the US released June CPI data this week. The overall CPI annual rate rose to 2.7%, the highest since February, in line with market expectations. The core CPI annual rate rose to 2.9%, the highest since February, lower than the expected 3% but slightly higher than the previous month's 2.8%. After the data release, the market's probability of an interest rate cut in September decreased from 65% to 58%, and the probability of two interest rate cuts this year decreased from 93% to 76%.
In terms of inventory, the inventory in the Shanghai Bonded Zone was approximately 4,700 mt this week, with a destocking of about 300 mt WoW. Domestic social inventory was approximately 40,300 mt, with an inventory buildup of 1,165 mt WoW. The inventory level increased slightly.
Currently, macro factors still dominate the direction of nickel prices. Due to uncertainties in external tariffs and geopolitics, there is a risk of a downward shift in the price center. The core reference range is 118,000-123,000 yuan/mt.
