At the beginning of this week, nickel prices continued to rebound slightly, with the most-traded SHFE nickel contract (NI2509) reaching a high of 123,000 yuan/mt, before pulling back significantly. It closed at 120,600 yuan/mt on Friday, with a weekly decline of 1.2%. The latest quote for LME nickel was $15,060/mt, with a weekly decline of 0.26%, and the week was dominated by weak oscillations. In the spot market, the average price of SMM #1 refined nickel this week was 123,000 yuan/mt, with a weekly decline of 450 yuan/mt. The premium for Jinchuan nickel fluctuated between 2,000-2,300 yuan/mt this week, while the premium range for domestic mainstream electrodeposited nickel remained at -100-300 yuan/mt this week. Spot transactions were sluggish, with few downstream orders for alloy electroplating and low purchase willingness. Traders' refined nickel inventory piled up significantly.
From a macro perspective, after the release of the US July CPI data this week, the market's expectation for the probability of an interest rate cut in September rose to over 94%. The US dollar index fell to around 98, and Trump publicly pressured Fed Chairman Powell to "cut interest rates immediately," further strengthening easing expectations. However, at the same time, European leaders urged Trump to pressure Putin to agree to a ceasefire and meet with Zelensky. Trump claimed that if Russia did not stop the conflict, it would face consequences. Geopolitical and policy uncertainties still bring uncertainties to the market. In the short term, nickel prices are still oscillating amid the tug-of-war between macro sentiment support and weak fundamentals and high inventory pressure, with a price range of 119,000-123,000 yuan/mt.
In terms of inventory, the inventory in the Shanghai Bonded Zone was approximately 4,700 mt this week, unchanged WoW.
Domestic social inventory was approximately 41,900 mt, with an inventory buildup of 1,320 mt WoW.
