[SMM Analysis] The Global Nickel Market Experienced a Roller Coaster Ride This Week, While Domestic Inventory Continued to Increase Significantly

This week, the global nickel market experienced a roller-coaster ride. Early in the week, driven by the core narrative of Indonesia's 2026 nickel ore quotas and coupled with optimistic sentiment from a global macro liquidity shift towards easing, nickel prices extended last week's surge, with LME nickel prices once rising to $18,000/mt and the most-traded SHFE nickel contract price approaching 150,000 yuan/mt. However, the euphoria did not last, as the sharp contradiction between "strong expectations" and "weak reality" quickly became apparent. Mid-week, LME nickel inventory surged by 20,000 mt in a single day, pushing the total to a high of 270,000 mt. On the other hand, downstream acceptance of high prices was extremely low, leading to a cliff-like correction in nickel prices in the mid-to-late week, with market sentiment shifting sharply from extreme optimism to cautious wait-and-see. In the spot market, the average price of SMM #1 refined nickel this week was 144,540 yuan/mt, up 4,350 yuan/mt WoW. The average premium for Jinchuan nickel this week was 8,700 yuan/mt, up 1,400 yuan/mt WoW. The premiums and discounts for mainstream domestic electrodeposited nickel brands ranged from -200 to 300 yuan/mt. Currently, downstream acceptance of high-priced nickel plates is low, and speculative stockpiling in the spot market is relatively evident.

On the macro front, US employment data released this week indicated continued economic resilience, leading to delayed expectations for the timing of US Fed interest rate cuts, which pushed the US dollar index higher. Domestically, accommodative policies provided a floor. The People's Bank of China's work conference clarified that moderately easy monetary policy would continue in 2026, with the liquidity environment remaining ample to support economic recovery, offering underlying support for the domestic commodity market. Going forward, close attention should be paid to the specific implementation and enforcement of Indonesia's nickel industry policies. Volatility may intensify, and the most-traded SHFE nickel contract price is expected to fluctuate within the range of 128,000-145,000 yuan/mt.

Inventory side, Shanghai Bonded Zone inventory was about 2,200 mt this week, flat WoW.

Domestic social inventory was about 61,000 mt, with a buildup of 2,126 mt WoW.