[SMM Nickel Post-Holiday Analysis] Nickel prices on the LME strengthened during the National Day holiday due to macro influences, and domestic prices showed a catch-up trend after the holiday.

SMM Nickel October 9 News:

1. Macro and Market News During the National Day Holiday:

(1)Due to the failure of the two parties in the US Congress to reach an agreement on the funding bill, the US federal government experienced a "shutdown" again after a seven-year interval.Starting from local time October 1, most staff of several important financial regulatory agencies, including the US Securities and Exchange Commission and the US Commodity Futures Trading Commission, were forced to take unpaid leave, some public services were suspended or delayed, and the release of economic data was also affected. Affected by the federal government shutdown, data such as US initial jobless claims for the previous week, September non-farm payroll additions, the unemployment rate, the August factory orders month-on-month rate, and August imports and exports were postponed.However, US ADP employment in September decreased by 32,000, the largest drop since March 2023, which was lower than the market expectation of 50,000.

(2)On October 3, 2025, Indonesia's Ministry of Energy and Mineral Resources officially announced Ministerial Regulation No. 17 of 2025, namely the "Procedures for the Preparation, Submission, Approval, and Implementation Reporting of the Work Plan and Budget for Mineral and Coal Mining Activities for 2026." This regulation changes the previously three-year RKAB approval system back to an annual system, to be re-implemented starting from 2026.

2. Spot Market on the First Trading Day After the Holiday:

On October 9, the SMM #1 refined nickel price was 122,100-125,100 yuan/mt, with an average price of 123,600 yuan/mt, up 1,150 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel was 2,300-2,400 yuan/mt, with an average premium of 2,350 yuan/mt, unchanged from the last trading day before the holiday. The spot premium/discount quotation range for mainstream domestic brands of electrodeposited nickel was -150-200 yuan/mt.As downstream users had largely completed stockpiling before the holiday, and traders were short of spot cargo, coupled with the significant rise in nickel futures prices on the first day after the holiday, market activity was mainly focused on inquiries, with limited spot transactions.

3. Futures Market on the First Trading Day After the Holiday:

Due to the rise in LME nickel prices during the holiday, the domestic market is expected to see catch-up gains after opening. The most-traded SHFE nickel contract (2511) opened at 121,300 yuan/mt on October 9. Nickel prices continued to rise during the morning session, and by the midday close, the contract was quoted at 123,330 yuan/mt, up 1.44%.

4. Market Outlook:

During the National Day holiday, LME nonferrous metals generally rose, with LME nickel breaking through the $15,500/mt level at its peak.Weak US ADP employment data in September led markets to anticipate a further 50 basis points of interest rate cuts within the year. Expectations for looser offshore US dollar liquidity have increased, boosting risk appetite in the nonferrous metals market.

The most critical variable for future nickel prices lies in Indonesian policies. Nickel's sensitivity to policy disruptions increases under low-price conditions, and short-term price fluctuations will heavily depend on the actual implementation of Indonesia's mining policies. News regarding quota approvals, export policies, or environmental protection crackdowns will trigger market volatility.At the same time, the pace of US Fed interest rate cuts and changes in China-US trade relations will also impact market risk and liquidity, thereby affecting nickel prices. The most-traded SHFE nickel contract is expected to trade within a range of 120,000-124,000 yuan/mt in the short term.

In the long term, the overall growth rate of global nickel consumption is falling short of expectations, while supply continues in surplus. Currently, LME nickel inventory has reached 232,632 mt, and SMM refined nickel social inventory stands at 41,000 mt. Against the backdrop of continuously rising global nickel inventories, the price center of nickel still faces the risk of moving lower.