Nickel prices consolidated on a subdued note this week, briefly stabilizing mid-week before drifting lower again. The most-traded SHFE nickel 2611 contract closed at 115,040 yuan/mt on Friday, down 4,060 yuan/mt WoW, a decline of about 3.4%. The LME nickel 3M contract was also under pressure, with the latest close at $15,250/mt as of October 15, down $450/mt from last Friday, a decline of about 2.9%. In the spot market, the weekly average price of SMM #1 refined nickel was 119,610 yuan/mt this week, down about 2,315 yuan/mt from the daily average trading price of last week (October 8-9). Jinchuan refined nickel premiums widened overall, with the average rising from 4,150 yuan/mt on Monday to 4,750 yuan/mt on Friday, up 600 yuan/mt during the week. The premium range for mainstream electrodeposited nickel strengthened from -200 to 600 yuan/mt to 0-600 yuan/mt. The spot market showed a divergent pattern of lower absolute prices alongside higher premiums for some brands.
On the macro front, the key event this week was the release of the latest US CPI data. On October 14, the US Bureau of Labor Statistics reported September CPI up 3.7% YoY, higher than the previous 3.4%; up 0.6% MoM, accelerating further from the previous 0.4%. Core CPI rose 2.6% YoY, higher than the previous 2.4%; up 0.3% MoM, flat with the previous reading. Gasoline prices rose 9.1% MoM, contributing more than half of the overall monthly CPI increase, indicating that this round of inflation rebound was mainly driven by energy prices, while core inflation has not accelerated further on a monthly basis. The stalled decline in inflation reinforced market concerns about further rate hikes by the US Fed, with the US dollar and Treasury yields fluctuating at highs, pressuring nickel prices. Their pullback later in the week provided a temporary reprieve. Domestically, September CPI rose 0.9% YoY, while PPI rose 5.0% YoY and 1.2% MoM, but the price increases in industrial products were mainly concentrated in production materials, not enough to suggest a full recovery in end-use demand.
At the industry level, the supplementary RKAB quotas in 2026 are being gradually released, but converting new quotas into actual production and shipments still takes time. Going forward, attention should focus on mine production resumptions and logistics realization. For intermediate products, concentrated sulfur arrivals at ports drove the resumption of production schedules at some MHP projects, while downstream acceptance of nickel salt purchases remained weak, with demand along the industry chain still lacking clear improvement.
On the inventory front, as of October 16, nickel inventory in the Shanghai Bonded Zone stood at 1,900 mt, flat WoW. Domestic nickel plate social inventory was 122,936 mt, about 122,900 mt, down 602 mt WoW. Domestic inventory continued to destock slightly, but the absolute level remained high, providing limited support to prices.
Nickel prices are currently caught between "US inflation rebound and rate hike expectations weighing on prices" and "stronger spot premiums for some brands and lingering expectations of Indonesian supply disruptions." Higher Jinchuan nickel premiums and slight destocking in social inventory provide some support, but high inventory and weak downstream demand still limit the room for a rebound. Overall, the most-traded SHFE nickel 2611 contract is expected to consolidate on a subdued note next week, with focus on US Fed policy signals, Indonesian supply realization, and refined nickel inventory changes.
![[NPI Daily Review] Nickel Prices Drag NPI Further Down; Market Liquidity Raises Concerns](https://imgqn.smm.cn/usercenter/fzwTi20251217171733.jpg)
