[SMM Nickel Midday Comment] On July 9, nickel prices plunged during the session, and US Fed officials did not form a single judgment on the subsequent policy path.

SMM nickel wire, July 9:

Macro and market news:

(1) The US military completed a new round of strikes against Iran on July 8 local time to further degrade Iran’s ability to attack merchant ships and innocent civilian mariners in the Strait of Hormuz, striking approximately 170 military targets over two consecutive days.

(2) The minutes of the US Fed meeting released early Thursday morning Beijing time showed that officials did not reach a single judgment on the subsequent policy path. If inflation remains elevated this year, rate hikes will be seen as a necessary option; if price pressures ease soon, rates could stay on hold.

Spot market:

On July 9, SMM #1 refined nickel prices rose 600 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 2,350 yuan/mt, flat from the prior day, and the range for mainstream domestic electrodeposited nickel brands was -400-400 yuan/mt.

Futures market:

The most-traded SHFE nickel contract (2609) pulled back sharply in the morning session, ending the morning at 125,640 yuan/mt, down 0.63%.

July falls within the RKAB application window for Indonesian nickel ore, and the final approval results will determine the H2 supply-demand pattern, making it the most critical variable of uncertainty right now. In the near term, nickel prices are expected to be in the doldrums within a range of 125,000-135,000 yuan/mt.