The most-traded SHFE nickel 2611 contract opened lower with a gap on October 9 following the National Day holiday, closing at 119,520 yuan/mt at midday, down 2.06% relative to the pre-holiday settlement price, according to Shanghai Metals Market (SMM). Macroeconomic pressure weighed heavily on nickel futures as US Treasury yields surged above 5.36% during the holiday period, reaching levels not seen since 2002, while the US dollar index shot up to 102.27, approaching an 18-month high. The US Federal Reserve's September minutes confirmed a hawkish stance, with all 19 policymakers unanimously supporting the 25 basis point rate hike in September, though most expect only one additional hike within the year.
CME data showed the probability of holding rates unchanged in October rose to 79.5%, while the probability of a cumulative 25 basis point hike by December stood at 68%. This broader risk asset repricing during the long holiday created headwinds for nickel, with spot gold hitting a two-month low below $4,100 and US stocks falling for three consecutive days. On the spot market, SMM reported the average price of number one refined nickel at 122,200 yuan/mt on October 8, down 1,400 yuan/mt from pre-holiday levels on September 30.
The average premium for Jinchuan number one refined nickel rose 250 yuan/mt to 4,000 yuan/mt, while mainstream domestic electrodeposited nickel brands ranged from minus 200 to 500 yuan/mt. Looking ahead, SMM analysts expect the most-traded SHFE nickel contract to trade within a range of 119,000 to 123,000 yuan/mt in the short term, with prices remaining capped by high inventory levels and weak demand fundamentals, though cost support limits downside room. On the policy front, Indonesia's Coordinating Minister for Downstreaming and Energy Transition Bahlil stated that if the global nickel market continues to experience oversupply, the Indonesian government is considering regulating the capacity utilization rates of nickel smelters.
According to SMM's reporting, Bahlil said the government would adjust smelting production according to global nickel market supply and demand conditions to avoid further pressure on prices from oversupply. The government is reportedly still calculating the price levels that could serve as the basis for adjusting smelting production. On the nickel ore front, Philippine nickel ore prices fell across all grades on October 8, with mainstream-grade CIF China prices declining notably.
The 1.3% nickel grade fell $2.5 per wet metric ton, while 1.4%, 1.5%, and 1.8% nickel grades each fell $2/wmt. Weather conditions in major Philippine producing areas, including Palawan, Visayas, and Mindanao, were affected by the Intertropical Convergence Zone and seasonal rainfall, with Zambales notably impacted by the rainy season, restricting mining, transportation, and port loading at some operations. SMM noted that downstream raw material inventories in China are currently relatively ample, estimated to last about two months.
Indonesian nickel ore prices were generally weak, with CIF Indonesia prices at main ports for 1.2%, 1.3%, 1.4%, 1.5%, and 1.6% nickel ore standing at $26.5, $28.5, $51.8, $58.5, and $63.4/wmt, respectively. The 1.2% limonite ore grade fell $0.5/wmt from the previous period. Indonesia is facing persistent dry conditions and water shortages rather than heavy rainfall, with industrial water pressure increasing in nickel industry hubs such as Morowali.
SMM survey data showed that some RKEF production lines have seen operating rates drop to approximately 30 to 40% of normal levels since September 22. Nickel sulphate prices declined on October 8 as production costs fell sharply driven by lower LME nickel prices during the holiday and SHFE nickel's catch-up move. SMM reported that some producers held elevated inventory levels and sought production cuts to destock, with overall supply edging lower.
Downstream enterprises remained focused mainly on long-term contract supply, with weak sentiment for building spot order inventory. The Willingness to Sell Sentiment Factor for upstream nickel salt smelters stood at 2.1, purchasing sentiment for downstream precursor plants at 2.0, and the sentiment factor for integrated enterprises at 2.2. Stainless steel futures consolidated lower, dragged by falling SHFE nickel.
The most-traded SS contract settled at 13,455 yuan/mt by close on October 8. Despite the notable decline in SS futures, restocking demand in surrounding markets after the holiday boosted trading activity, limiting the decline in stainless steel spot prices. The most-traded SS 2611 contract was reported at 13,530 yuan/mt at 10:15 a.m., down 165 yuan/mt from the previous trading day.
According to SMM, spot premiums for 304/2B in Wuxi were in the range of 640 to 1,040 yuan/mt. All data and analysis are sourced from Shanghai Metals Market (SMM) as cited in the original report dated October 9, 2026.
Source: news.metal.com