Nickel prices remained weak overall this week. On Monday, after the Mid-Autumn Festival holiday, the market resumed trading amid rising US Treasury yields and a stronger US dollar, compounded by higher inventories outside China. SHFE nickel saw a catch-up decline, with the most-traded contract closing at 123,940 yuan/mt, down 1,380 yuan/mt from the last trading day before the holiday on 24 September. On Tuesday, US Treasury yields and oil prices fluctuated at highs, sustaining macro pressure. The most-traded SHFE nickel contract closed at 123,040 yuan/mt, down 900 yuan/mt from the previous trading day. On Wednesday, the pullback in oil prices failed to offset pressure from interest rates and the US dollar. The most-traded SHFE nickel 2611 contract opened lower in early trading and closed at 122,040 yuan/mt. Outside China, LME nickel electronic trading closed at $16,165/mt on 28 September and $15,985/mt on 29 September, down $400/mt WoW as of 29 September, a decline of about 2.44%.
In the spot market, SMM #1 refined nickel average spot prices fell for three consecutive days this week, at 125,700 yuan/mt on Monday, 124,700 yuan/mt on Tuesday, and 123,600 yuan/mt on Wednesday. The three-day average was 124,667 yuan/mt, down about 2,058 yuan/mt from the average of the four quotes last week, a decline of about 1.62%. Wednesday's average spot price was down 3,300 yuan/mt cumulatively from 24 September before the holiday, a drop of about 2.60%. Jinchuan nickel premiums remained relatively high, with three-day average premiums of 3,800 yuan/mt, 3,700 yuan/mt, and 3,750 yuan/mt respectively, showing limited overall fluctuations. The premium range for mainstream electrodeposited nickel widened from parity to a premium of 500 yuan/mt on Monday, to a discount of 200 yuan/mt to a premium of 500 yuan/mt on Tuesday and Wednesday, with low-end quotes weakening somewhat.
On the industry front, with the National Day holiday approaching, procurement along the industry chain gradually wound down, and trading activity thinned. NPI supply was relatively ample, downstream purchasing was cautious, and transactions remained concentrated at low levels. The nickel sulphate market saw weak supply and demand, with some salt plants planning production cuts, but demand reduction expectations were more pronounced, keeping prices under pressure.
On the macro front, nickel prices this week were mainly affected by high US Treasury yields, a stronger US dollar, and energy price fluctuations triggered by Middle East tensions. According to SMM's weekly report, US Treasury yields rose rapidly early in the week, with a strong dollar and interest rate pressure again dominating base metals trading. On Tuesday, the combination of high US Treasury yields and oil prices continued to weigh on market sentiment. On Wednesday, although US-Iran negotiations pushed oil prices lower, interest rate and dollar pressure had yet to ease, and nickel prices remained weak. Energy price changes also affected inflation expectations and monetary policy expectations, with the pullback in oil prices providing limited support to nickel prices for now.
Nickel's own high inventories and weak demand further limited room for price rebounds. On the supply side, although there were disruptions from the rainy season in some mining areas in the Philippines and water shortages at some smelting facilities in Indonesia, supply expectations from the gradual release of additional RKAB quotas remained intact, and localised disruptions were not enough to reverse the overall weak picture. During the National Day holiday, attention should be paid to overseas interest rates, the US dollar, and LME inventory changes. After the holiday, the focus will be on the strength of downstream purchasing recovery.
![[SMM Analysis] Downstream Demand Shows No Significant Recovery, Nickel Intermediate Product Payables in the Doldrums This Week](https://imgqn.smm.cn/usercenter/WNjzM20251217171732.jpeg)
