[SMM Nickel Midday Review] On June 26, nickel prices fell sharply, and the US May PCE annual rate recorded 4.1%

SMM Nickel, Jun 26:

Macro and Market News:

(1) The US PCE price index for May recorded a YoY increase of 4.1%, the highest level since April 2023, while the core PCE rose 3.4% YoY, both in line with expectations. The Q1 GDP growth was revised up from 1.6% to 2.1%.

(2) The Ministry of Commerce responded to the latest progress in China-US economic and trade consultations: both sides agreed to establish a trade council and will discuss cooperation, including reciprocal tariff reductions, under this council.

Spot Market:

On Jun 26, the SMM #1 refined nickel price fell by 1,750 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 1,350 yuan/mt, down 250 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -600 to 300 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2607) fell sharply in early trading, closing at 127,120 yuan/mt, down 1.79%.

July is about to enter a critical period for supplementary quota amendment applications. Inventory pressure remains the core contradiction; refined nickel supply is ample and destocking is difficult. Both domestic and international refined nickel inventories remain at high levels, and the destocking speed is slow. In the short term, nickel prices are in the doldrums.