[SMM Analysis] Nickel prices fluctuated significantly this week, while domestic inventory saw a substantial buildup.

This week, nickel market experienced significant volatility. Prices initially strengthened due to disruptions from Indonesian mining policies, with the most-traded SHFE nickel contract rising to around 125,000 yuan/mt. However, upward momentum subsequently weakened as bullish sentiment faded, leading to a sharp pullback in prices. As of October 10, the contract settled at 122,180 yuan/mt, up 0.49% from pre-National Day levels. During the holiday, LME nickel prices broke through $15,600/mt, driven by strength in the nonferrous metals sector, but pulled back after the holiday, with the latest quote at $15,320/mt, down 0.68% WoW. In the spot market, the average price of SMM #1 refined nickel this week was 123,725 yuan/mt, up 1,400 yuan/mt WoW. The average premium for Jinchuan nickel this week was 2,300 yuan/mt, down 50 yuan/mt WoW, while the premium for mainstream domestic electrodeposited nickel brands ranged from -150 to 200 yuan/mt, remaining relatively stable. In terms of transactions, as downstream users had largely completed stockpiling before the holiday and futures prices surged after the holiday, market activity was dominated by inquiries, with limited spot transactions.

From a macro perspective, multiple domestic and overseas policies and events exerted mixed bullish and bearish impacts on nickel prices. The most notable event was Indonesia's announcement to shorten the validity period of mining quotas (RKAB) from three years to one year, meaning that some enterprises' already obtained 2026 quotas would be invalidated and require reapplication. This move raised market concerns about the stability of medium-term nickel ore supply, providing short-term support for nickel prices. The shutdown of the US federal government starting October 1 delayed the release of key economic data, adding uncertainty to the global economic outlook. The current market focus revolves around the tug-of-war between "supply-side disruptions" and "weak fundamentals with high inventory," making it difficult for nickel prices to form a unilateral trend in the short term. The reference trading range for the most-traded SHFE nickel contract is 120,000-124,000 yuan/mt.

Inventory side, Shanghai Bonded Zone inventory stood at about 3,700 mt this week, flat WoW.

Domestic social inventory was approximately 43,700 mt, with a buildup of 2,865 mt WoW.