Nickel Prices Weaken as Middle East Supply Risks Intensify Oil Price Surge

Nickel prices declined on September 8 due to intensified Middle East supply risks and their impact on oil prices, which reached a six-week high. The Saudi Aramco oil facilities were attacked, compounded by weekend mutual attacks on tankers between the US and Iran and Iran's warning that it would establish a 'restricted zone' outside the Strait of Hormuz.

The OPEC+ meeting on Sunday kept October production policy unchanged, while the market is pricing in a 75% probability of a 25 bp rate hike by the Bank of Japan at its September 18 meeting. The yen surged to a seven-month high, and the US dollar fell below the 99 mark.

The spot market saw SMM #1 refined nickel average price decline to 127,850 yuan/mt, down 650 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 1,750 yuan/mt, up 100 yuan/mt from the previous trading day.