[SMM Analysis] Nickel prices rebounded this week, while social inventory continued to accumulate.

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Nickel prices this week showed a pattern of "strength overseas and stability domestically," with LME nickel performing strongly while domestic SHFE nickel prices saw relatively mild gains. The LME nickel price settled at $15,320/mt on Friday, up 1.39% WoW, while the most-traded SHFE nickel contract (2512) closed 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 spot 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 accordingly.

On the macro front, the ongoing US government shutdown crisis continued to raise concerns about US dollar liquidity. Additionally, conflicting signals from the US Fed created uncertainty; while market expectations for interest rate cuts exist, some "hawkish" remarks also contributed to volatility, 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 trade consultations with the US. The communique from the domestic Party's Fourth Plenum outlined key priorities for the next five-year development plan, and market expectations for subsequent measures to stimulate domestic demand and promote industrial upgrading provided short-term support for nickel prices. Nickel prices are expected to maintain a sideways movement, with the core fluctuation range for the most-traded SHFE nickel contract seen at 120,000–124,000 yuan/mt.

Inventory-wise, Shanghai Bonded Zone stocks this week were approximately 3,400 mt, down 300 mt WoW. Domestic social inventory stood at about 48,800 mt, showing an inventory buildup of 1,094 mt WoW.