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.

According to SMM data, on July 31, the FOB price of Indonesian MHP nickel fell by $47/mt Ni from the previous day, while the FOB price of Indonesian MHP cobalt rose by $10/mt Co. The FOB price of Indonesian high-grade nickel matte fell by $48/mt Ni.

This week, the MHP market supply-demand pattern remained relatively loose, with nickel and cobalt payables still weak. On the supply side, after the strait reopened, some producers’ MHP output recovered somewhat, and some traders also released inventory to a degree recently, boosting market availability. On the demand side, downstream nickel salt and cobalt salt prices stayed sluggish, and losses in cobalt sulphate production created significant pressure, leaving salt producers relatively less willing to accept high-priced MHP and weighing on MHP payables. With supply rising and demand soft, MHP payables may pull back in the short term. The high-grade nickel matte market also faced a weak supply-demand pattern. High-grade nickel matte currently offers a clear cost advantage over MHP, but on the supply side, major suppliers have already completed long-term order signing, leaving limited spot availabilities. On the demand side, limited by downstream production line compatibility, actual consumption capacity is insufficient. Overall purchase sentiment was weak, trading activity was low, and payables remained stable. Sulphur (CIF Indonesia) held steady at $1,100-1,200/mt, with no new deals this week. During the earlier phased navigation period, several sulphur vessels bound for Indonesia gradually arrived at ports. MHP refineries now have relatively ample inventory, with low purchase willingness and buyer psychological price levels below $1,100/mt. Prices are expected to continue to consolidate at highs next week, trading will stay sluggish, and neither a sharp rise nor a sharp decline is likely to find a driver. On the nickel price front, nickel prices continued to consolidate this week. With quotas still unclear, a clear trend was hard to form. Meanwhile, MHP payables held steady, and MHP nickel prices remained stable with slight increases. Against a backdrop of stable high-grade nickel matte payables, prices consolidated along with nickel prices. In addition, MHP cobalt prices edged slightly higher on the back of a cobalt price rebound. Overall, the intermediate product market will be under pressure in the short term.

On July 31, the SMM battery-grade nickel sulphate average price edged down slightly.

SMM Nickel, July 31: Macro and Market News: (1) The Japanese government and the Bank of Japan conducted a currency intervention involving buying yen and selling US dollars, while the US monetary authorities also conducted “exchange rate checks” as a preliminary step to intervention. (2) Data released by the US Department of Commerce on Thursday showed that the Personal Consumption Expenditures (PCE) price index fell 0.1% MoM last month, dragged down by lower energy prices. The PCE inflation rate YoY fell to 3.7%, down from 4.1% in May, after hitting a three-year high. Spot Market: On July 31, the SMM #1 refined nickel average price was 132,600 yuan/mt, up 600 yuan/mt from the previous trading day. Regarding spot premiums, Jinchuan #1 refined nickel averaged 1,200 yuan/mt, flat from the previous trading day, while domestic mainstream brand electrodeposited nickel ranged from -300 to 500 yuan/mt. Futures Market: The most-traded SHFE nickel 2609 contract shot up in early trading then pulled back slightly, closing the morning session at 131,900 yuan/mt, up 0.49%. The July FOMC meeting kept interest rates unchanged, and a weaker US dollar pushed most nonferrous metals higher; expectations of tighter quotas in Indonesia and sulfur cost support are solidifying the bottom for nickel prices. The most-traded SHFE nickel contract is expected to trade in the range of 128,000-135,000 yuan/mt.

[SMM Cobalt Lithium Morning Meeting Summary: Raw Material Price Divergence Intensifies; Energy Storage Demand Supports Continued Industry Prosperity] This week, the relevant material markets continued to diverge in performance. Upstream ore prices stopped falling and rebounded, but high-price transactions remained constrained. Some ex-China capacities gradually recovered, and market attention shifted from supply disruptions to the pace of new capacity releases. Salt products were supported by maintenance outages, tightening circulation of spot orders, and low inventories, leading to somewhat active spot transactions. However, downstream players still mainly made just-in-time procurement on price dips, and concentrated stockpiling has yet to emerge. The cobalt industry chain remained under pressure overall, with the price centers of refined cobalt, intermediate products, cobalt salts, and cobalt powder shifting downward. Off-season demand, inventory pressure, and low-priced cargoes continued to weigh on the market. Nickel sulphate inventories declined, and cost support strengthened somewhat. Prices of ternary cathode precursors and ternary cathode materials generally remained stable. The LFP, electrolyte, and sodium-ion battery sectors performed relatively strongly, with demand from energy storage, commercial vehicles, and Q3 stockpiling driving production schedules higher. Inventories of some products continued to decline. The anode and separator markets were generally stable. Different raw material varieties in the recycling sector showed divergent performance. The overall industry chain remained in a phase of concurrent demand improvement and cost pass-through.

On July 30, the SMM battery-grade nickel sulphate average price remained stable.

SMM Nickel July 30 News: Macro and Market News: (1) The US Fed kept the federal funds rate target range unchanged at 3.5% to 3.75%. This marked the fifth consecutive rate hold this year. The Federal Open Market Committee (FOMC) passed the resolution with 9 votes in favor and 3 against. (2) On the afternoon of July 29, Trump stated that because "Iran launched missiles at US troops in the Middle East," the US "will deal a heavy blow to Iran." Spot Market: On July 30, the SMM #1 refined nickel average price stood at 132,000 yuan/mt, up 500 yuan/mt from the previous trading day. In terms of spot premiums, the Jinchuan #1 refined nickel average was 1,200 yuan/mt, down 50 yuan/mt from the previous trading day, with the range for domestic mainstream brands of electrodeposited nickel at -300 to 500 yuan/mt. Futures Market: The most-traded SHFE nickel 2609 contract retreated after rapid rise in morning trading, with the morning session closing at 130,780 yuan/mt, up 0.28%. The July FOMC meeting kept rates unchanged, and the US dollar weakened, pushing most non-ferrous metals to close higher. Expectations of tighter quotas in Indonesia and sulfur cost support firmed the bottom of nickel prices. The most-traded SHFE nickel contract is expected to trade in the range of 128,000-135,000 yuan/mt.

On July 30, the average price of SMM #1 refined nickel was 132,000 yuan/mt, up 500 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel stood at 1,200 yuan/mt, down 50 yuan/mt from the previous trading day, while the range for mainstream domestic brands of electrodeposited nickel was -300-500 yuan/mt.

[7.29 Morning Meeting Minutes] The US Fed is scheduled to announce its interest rate decision at 2 a.m. Beijing time on Thursday, and Fed Chairman Warsh will hold a press conference as usual at 2:30 a.m., which has been dubbed by the industry as the most unpredictable Fed decision. The most-traded SHFE nickel contract (2609) plunged sharply in the night session, with prices gradually rebounding in the morning session before closing at 131,660 yuan/mt, up 0.08%. The short-term trading range for the most-traded SHFE nickel contract (NI2609) is expected to be 128,000-135,000 yuan/mt.