[SMM Analysis] Nickel Prices Rebounded This Week, While Social Inventory Continued to Accumulate

This week, nickel prices exhibited a pattern of "strength overseas and stability domestically," with LME nickel prices showing strong performance, while domestic SHFE nickel prices saw relatively mild gains. LME nickel closed at $15,320/mt on Friday, up 1.39% WoW, and the most-traded SHFE nickel contract (2512) settled at 122,150 yuan/mt on Friday, up 0.67% WoW. In the spot market, the average price of SMM #1 refined nickel this week was 122,350 yuan/mt, up 550 yuan/mt WoW. The average premium for Jinchuan nickel this week was 2,500 yuan/mt, increasing by 100 yuan/mt WoW, while the premium range for mainstream domestic electrodeposited nickel brands was -100-200 yuan/mt, showing a slight rise. Since entering October, spot transactions have improved, and spot premiums for nickel cathode have stabilized and risen in tandem.

On the macro front, the ongoing US government shutdown crisis continued to raise concerns about US dollar liquidity. Additionally, there was a tug-of-war in the US Fed's policy signals; while market expectations for interest rate cuts exist, some "hawkish" remarks also introduced uncertainty, affecting market sentiment. Developments in China-US economic and trade relations were also a focus this week, with China scheduled to travel to Malaysia for economic and trade consultations with the US. The communique from the domestic Party's Fourth Plenary Session outlined the key points of the next five-year development plan, and the market expects subsequent measures to stimulate domestic demand and promote industrial upgrading, providing short-term support for nickel prices. Nickel prices are expected to continue their sideways movement, with the core fluctuation range for the most-traded SHFE nickel contract seen at 120,000-124,000 yuan/mt.

Inventory side, Shanghai Bonded Zone inventory was approximately 3,400 mt this week, down 300 mt WoW.

Domestic social inventory was approximately 48,800 mt, with an inventory buildup of 1,094 mt WoW.