Nickel prices extended their decline this week and are expected to consolidate near lows in the short term, according to Shanghai Metals Market (SMM). After a brief stabilization in the middle of the week, prices drifted lower again. The most-traded SHFE nickel 2611 contract closed at 115,040 yuan/mt on Friday, down 4,060 yuan/mt week-on-week, a decline of about 3.4%.
On the London Metal Exchange (LME), the nickel 3M contract closed at $15,250/mt as of October 15, down $450/mt from the previous Friday, a decline of about 2.9%, per SMM data. 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). SMM reported that Jinchuan refined nickel premiums widened overall, rising from 4,150 yuan/mt on Monday to 4,750 yuan/mt on Friday, an increase of 600 yuan/mt during the week.
The premium range for mainstream electrodeposited nickel strengthened from -200 to 600 yuan/mt to 0 to 600 yuan/mt. SMM described a divergent pattern in which absolute prices fell while premiums rose for some brands. On the macroeconomic front, the key event this week was the release of US consumer price index (CPI) data.
According to the US Bureau of Labor Statistics, September CPI rose 3.7% year-on-year, up from the previous 3.4%, and increased 0.6% month-on-month, accelerating from the previous 0.4%. Core CPI rose 2.6% year-on-year, compared with the previous 2.4%, and increased 0.3% month-on-month, unchanged from the prior reading. Gasoline prices rose 9.1% month-on-month, accounting for more than half of the overall monthly CPI increase.
SMM noted that the rebound was mainly driven by energy prices, while core inflation did not accelerate further on a monthly basis. The stalled decline in inflation fueled market concerns about further rate hikes by the US Fed, with the US dollar and Treasury yields fluctuating at highs and pressuring nickel prices. A pullback later in the week provided a temporary reprieve.
In China, September CPI rose 0.9% year-on-year, while PPI rose 5.0% year-on-year and 1.2% month-on-month. SMM said the increases in industrial product prices were concentrated in production materials and were not sufficient to signal a full recovery in end-use demand. At the supply level, SMM reported that supplementary 2026 RKAB quotas in Indonesia are being gradually released, but converting new quotas into actual production and shipments will take time.
Attention is focused on the resumption of mine production and logistics. For intermediate products, concentrated sulfur arrivals at ports led to the resumption of production schedules at some MHP projects, while downstream acceptance of nickel salt purchases remained weak and demand along the industry chain still lacked clear improvement. Inventory data showed that as of October 16, nickel inventory in the Shanghai Bonded Zone stood at 1,900 mt, flat week-on-week.
Domestic nickel plate social inventory was 122,936 mt, down 602 mt week-on-week. SMM noted that domestic inventory continued to destock slightly, but the absolute level remained high, providing limited support to prices. SMM described nickel prices as caught between US inflation and rate hike expectations, which weigh on prices, and stronger spot premiums for some brands alongside lingering expectations of Indonesian supply disruptions.
Higher Jinchuan premiums and slight social inventory destocking provide some support, but high inventory and weak downstream demand limit the room for a rebound. SMM expects the most-traded SHFE nickel 2611 contract to consolidate on a subdued note next week, with market focus on US Fed policy signals, the realization of Indonesian supply, and changes in refined nickel inventories. SMM noted that its data are for reference only and do not constitute decision-making recommendations.
Source: news.metal.com