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

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Nickel market experienced significant volatility this week. Prices initially strengthened due to disruptions in Indonesian mining policies, with the most-traded SHFE nickel contract rising to around 125,000 yuan/mt. However, upward momentum waned, bullish sentiment faded, and prices pulled back sharply. As of October 10, it closed at 122,180 yuan/mt, up 0.49% from pre-National Day levels. LME nickel prices broke through $15,600/mt during the holiday, driven by strength in the nonferrous sector, but fell in sync after the holiday, with the latest quote at $15,320/mt, down 0.68% WoW.

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 Jinchuan nickel premium was 2,300 yuan/mt, down 50 yuan/mt WoW. The premium for mainstream domestic electrodeposited nickel remained relatively stable, ranging from -150 to 200 yuan/mt. In terms of transactions, downstream users largely completed stockpiling before the holiday. Coupled with a sharp post-holiday rise in nickel futures prices, market activity was mostly inquiries, with limited spot transactions.

Macro perspective, multiple domestic and overseas policies and events exerted mixed influences 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 some enterprises' already obtained 2026 quotas would be voided and require reapplication. This move raised concerns over medium-term nickel ore supply stability, providing short-term support for nickel prices. The US federal government shutdown starting October 1 delayed key economic data releases, adding uncertainty to the global economic outlook. The current market focus lies in the contest 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 most-traded SHFE nickel contract is expected to trade in the range of 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 around 43,700 mt, with a buildup of 2,865 mt WoW.