[SMM Analysis] Nickel Prices Rose First Then Fell This Week, With Minor Inventory Buildup Domestically

Nickel prices rose first and then fell this week. As of September 5, the most-traded SHFE nickel 2510 contract closed at 121,310 yuan/mt, down 0.65% WoW. LME nickel prices also weakened, with the latest quote at $15,270/mt, down $130 WoW, a 0.84% decline. On the spot market, the average price of SMM #1 refined nickel this week was 122,910 yuan/mt, down 700 yuan/mt WoW. The average premium for Jinchuan nickel this week was 2,100 yuan/mt, down 300 yuan/mt WoW, mainly due to weak downstream demand recovery, with transactions mainly concluded at low prices and limited buying interest. The premium range for mainstream electrodeposited nickel remained at -200-300 yuan/mt this week, though the premium for electrodeposited nickel declined.

On the macro front, large-scale protests in Jakarta and other Indonesian cities since last Friday raised concerns over nickel supply, driving prices sharply higher early this week before pulling back after the events subsided. Trump announced plans to hold an emergency meeting on tariff rulings and may appeal to the Supreme Court, with policy uncertainty further disrupting market expectations. The US dollar index rebounded, and a stronger dollar directly pressured nickel prices. Meanwhile, gold and silver gained this week as funds shifted to safe-haven metals. The August US non-farm payrolls data is due Friday, and weaker-than-expected data could strengthen expectations for an interest rate cut. Nickel prices are expected to hold up well in the near term, with a price range of 121,000-125,000 yuan/mt.

Inventory side, Shanghai Bonded Zone inventory stood at around 4,300 mt this week, down 400 mt WoW.

Domestic social inventory was approximately 39,900 mt, up 459 mt WoW.