[SMM Analysis] Nickel prices rose first and then fell this week, with a slight inventory buildup in the domestic market

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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 (0.84%) WoW.

On the spot market, the average price of SMM #1 refined nickel was 122,910 yuan/mt this week, down 700 yuan/mt WoW. The average premium for Jinchuan nickel was 2,100 yuan/mt, down 300 yuan/mt WoW, mainly due to weak downstream demand recovery, with transactions mostly concluded at low prices and limited buying interest. The premium range for mainstream electrodeposited nickel remained at -200-300 yuan/mt this week, though premiums declined slightly.

On the macro front, large-scale protests in Jakarta and other Indonesian cities since last Friday raised concerns over nickel supply disruptions, initially driving prices sharply higher early this week before pulling back as tensions eased. Former US President Trump announced plans to hold an emergency meeting on tariff rulings and potentially appeal to the Supreme Court, adding policy uncertainty that further clouded market expectations. A rebound in the US dollar index and broader greenback strength directly pressured nickel prices. Meanwhile, gold and silver gained as funds shifted to safe-haven assets.

The August US non-farm payrolls data due Friday could reinforce rate-cut expectations if it misses forecasts. Nickel prices are expected to hold up well in the near term, with a projected range of 121,000-125,000 yuan/mt.

Inventory-wise, Shanghai Bonded Zone stocks stood at around 4,300 mt this week, down 400 mt WoW. Domestic social inventory totaled approximately 39,900 mt, up 459 mt WoW.