The US dollar exchange rate, China’s economic situation, global economic growth prospects, possible nickel export restrictions from Russia, and the Federal Reserve’s interest rate cut policy have collectively affected the London metal market, particularly the performance of nickel prices. These macro factors led to significant fluctuations in nickel prices, ultimately driving the nickel price to bottom out and rebound in September. According to the monitoring of nickel prices by Shengyi Society, the price of nickel dropped to 121716 yuan/ton on September 11th, hitting a new low since May 2021, and then rebounded. As of September 30th, spot nickel was reported at 132016 yuan/ton, with a monthly increase of 0.12%.

Macroscopically, at the beginning of the month, due to mixed employment data in the United States, the strengthening of the US dollar exchange rate, and the slowdown in manufacturing activity in China, the world’s top metal consumer, intensified concerns about global economic growth prospects, dragging down the majority of metal market varieties in London and causing a volatile decline in nickel prices. On September 11th, the Russian President stated that Moscow should consider restricting nickel exports. If Russia implements the proposed ban, global nickel supply may shift from the current global oversupply of 100000 tons to a shortage. The news pushed nickel prices up significantly. On the morning of the 24th, the People’s Bank of China announced that it would cut the deposit reserve ratio by 0.5 percentage point in the near future, providing about 1 trillion yuan of long-term liquidity to the financial market; Reduce the interest rate of existing housing loans and unify the minimum down payment ratio for housing loans, guiding commercial banks to lower the interest rate of existing housing loans to near the interest rate of newly issued housing loans, with an expected average decrease of about 0.5 percentage points. On the 25th, the Federal Reserve cut interest rates by 50 basis points, marking the first time since 2020 that interest rates had been cut, and the magnitude of the cut exceeded expectations, opening the first monetary policy easing cycle in four years. At the same time, the decline of the US dollar has made metals priced in US dollars more attractive to buyers using other currencies. Stimulated by multiple heavyweight policies such as reserve requirement ratio cuts and interest rate cuts in China, nickel prices have risen significantly, reversing the recent unfavorable market trend.

On the supply side: The situation of oversupply in the nickel market continues, and inventory is under pressure, resulting in a doubling of growth rate. As of September 27th, Shanghai nickel inventory was 25504 tons, an increase of 2892 tons from last week; On September 27th, LME nickel inventory was 130308 tons, an increase of 11310 tons from last week.

On the demand side: The overall consumption performance is average. When prices hit bottom, there is a strong purchasing atmosphere, smooth shipments, and reduced inventory. After prices rise, user purchases slow down. The demand for alloys in military and shipping industries is still acceptable, and customers have a strong need to continue. In September, stainless steel prices fell slightly, and the market was also affected by the pattern of strong supply and weak demand. As of the end of September, the spot price of stainless steel was 13567.50 yuan/ton, a decrease of 1.95% compared to September 1 (13837.50). Driven by macroeconomic factors, prices have only slightly improved, but overall, low prices are still the main driving force for transactions, with businesses generally reducing inventory before the holiday.

Market forecast: Macro bullish outlook boosted, but the pattern of strong supply and weak demand continues, and it is expected that nickel prices will mainly experience short-term consolidation and upward movement.