On February 6, the main contract of Shanghai nickel opened at 124,860 yuan/ton and closed at 124,960 yuan/ton, up by 100 yuan/ton from the previous trading day's closing price. Intraday trading was weaker compared to the previous trading day, with an increase of 70,399 lots in trading volume and a decrease of 3,598 lots in open interest. This combination indicates a strong wait-and-see atmosphere for both long and short positions, with both sides reducing trading activity. The decrease in open interest coupled with the price increase indicates that the short positions in the futures market are surrendering and starting to actively cover shorts (i.e., buying to hedge), pushing prices higher. Although the short positions are actively covering, they are relatively rational and not urgent, seeking ideal prices. Therefore, prices are expected to rise slowly, and there is a high probability of sustained upward movement.

The expectations are pessimistic. The bottom cost support is still there. Production reduction is expected to fall in October, stainless steel prices rebounded slightly after the holiday and remained weak.

SMM believes that cost support will remain strong next week, buyer sentiment will continue, and the stainless steel contract will fluctuate downward next week.

China’s output of high-carbon ferrochrome remained stable at 601,500 mt in July, an increase of 1,200 mt, or 0.2% MoM, and an increase of 40,900 mt, or 7.3% YoY.

China's copper cathode output in July was 925,900 mt, an increase of 8,000 mt or 0.9% month-on-month, and a growth of 10.2% year-on-year; The output increased 23,800 mt compared with the expected 902,100 mt.