Last week, the SHFE nickel main contract traded in a range of 114,440-119,500 yuan/t, closing at 115,330 yuan/t, down 3.34% week-on-week, hitting a low of 114,440 yuan/t during the week and continuing to set a new low for the year; LME nickel 3M closed at US $15,125/t, down 3.04% week-on-week. On the macro side, after the Fed's September rate hike was delivered, market focus shifted to the October and December FOMC meetings. During the week, the US September CPI came in above expectations, rate hike expectations heated up, and a stronger dollar continued to weigh on the base metals complex.
On the fundamentals side, nickel ore prices continued to be weak. Indonesia's HMA for the second half of October was further revised down, HPM for all grades moved down in tandem, and pyrometallurgical ore discounts deepened further. The Philippine rainy season was delayed, supply contraction expectations fell through, port inventories continued to accumulate, and miners' pricing power continued to weaken.
NPI prices accelerated their decline, with transaction prices falling to 1,015-1,025 yuan/nickel during the week. Downward revisions to steel mill production schedules combined with inverted profits strengthened their willingness to press prices. The bid-ask spread remained at 15-20 yuan/nickel, making actual transactions difficult. Refined nickel prices fell below the 115,000 yuan/t mark.
The Jinchuan nickel premium remained firm at a high level throughout the week, electrodeposited nickel brand premiums posted mixed changes, imported nickel volatility increased, downstream buying remained hand-to-mouth, and overall transactions were light. Domestic social inventory edged down to 120,574 t, and global visible inventories fell in tandem.
In nickel intermediates, the MHP nickel discount was 85.5%, cobalt discount 56.5%, and high-grade nickel matte 92.5%, all unchanged from the week before last. However, MHP cash costs continued to shift down to around US $14,479/nickel t, nickel sulfate prices fell sharply, and demand remained weak.
Overall, last week nickel prices accelerated their decline. Continuous HMA cuts on the ore side and deepening negative premiums, loose NPI supply and weak demand, refined nickel breaking below key thresholds, and continuously weakening cost support for intermediates further confirmed the dual-weak supply-demand pattern. As the fourth quarter begins, the long-term contract negotiation window is gradually opening. Market discussions on next year's production and import plans are becoming more concentrated, which may have a phased impact on market sentiment and liquidity. Next week, SHFE nickel is expected to remain weak and rangebound, with a trading range of 113,000-117,000 yuan/t.
Key focus areas ahead: The October and December rate hike paths, Indonesian nickel ore price trends, subsequent stainless steel production schedules, intermediate costs, and changes in nickel sulfate demand.
