[SMM Analysis] Macro sentiment recovered this week, combined with destocking outside China, nickel prices drifted higher

This week, nickel prices drifted higher overall. On the macro front, the US Fed's July FOMC meeting voted 9:3 to hold rates steady, in line with market expectations, but internal dissent intensified—three voting members backed a rate hike. The US June PCE price index fell 0.1% MoM, the first monthly negative print since 2020. Industry-wise, the window for Indonesia's RKAB quota revision filings officially closed on July 31, US-Iran tensions fluctuated, and the marginal pressure from tight sulfur supply eased after initial tightness. LME nickel inventory dropped by a cumulative total of over 8,000 mt in July, offering additional support for nickel prices. In the spot market, the average price of SMM #1 refined nickel was 132,250 yuan/mt this week, up 250 yuan/mt WoW. Jinchuan refined nickel premiums weakened continuously this week, falling to 1,200 yuan/mt, while mainstream electrodeposited nickel discounts ranged from -300 to -500 yuan/mt. Spot market trading remained sluggish this week, with weak downstream inquiry interest.

Macro front, the central event this week was the US Fed's July FOMC meeting. On July 30, the US Fed announced it would maintain the federal funds rate target range at 3.50%-3.75%, matching market expectations. This marked the fifth consecutive meeting since September 2025 that the Fed held rates unchanged. The main takeaway from this meeting was a notable escalation in internal division—the vote was 9:3, with three voting members favoring a 25bp rate hike. The US June PCE price index fell 0.1% MoM, the first monthly negative print since 2020; the YoY increase narrowed to 3.7% from 4.1% the prior month. Core PCE YoY growth edged down to 3.3% from 3.4%, rising only 0.1% MoM, below the 0.2% market expectation. Cooling inflation was driven by retreating oil prices in June, but with US-Iran tensions escalating in July, inflation expectations are likely to prove stubborn.

Inventory side, this week, Shanghai Bonded Zone inventory stood at roughly 1,700 mt, flat WoW. China's social inventory was approximately 131,000 mt, with a WoW buildup of about 1,600 mt.

Nickel prices are currently in a bullish resonance window, marked by improving macro sentiment, confirmed supply tightening, and marginal inventory destocking. In the short term, the core trading range for the most-traded SHFE nickel contract next week is expected to be 130,000-137,000 yuan/mt.