[SMM Nickel Midday Review] June 16 nickel prices edged down, the Bank of Japan raised interest rates to the highest level in 31 years.

SMM Nickel June 16 Update:

Macro and market news:

(1) The Bank of Japan raised its short-term policy interest rate from 0.75% to 1.0%, bringing it to the highest level in 31 years. The long-anticipated move signals its commitment to addressing inflation risks stemming from the Middle East conflict.

(2) Iranian media: The US has begun lifting its maritime blockade, with multiple Iranian vessels passing through US-blockaded waters without incident.

Spot market:

On June 16, SMM #1 refined nickel spot prices fell by 500 yuan/mt from the previous trading day. For spot premiums, the average for Jinchuan #1 refined nickel was 1,500 yuan/mt, down 150 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -400 to 400 yuan/mt.

Futures market:

The most-traded SHFE nickel contract (2607) moved sideways in early trading. As of the morning session close, it was reported at 135,700 yuan/mt, up 0.27%.

The finalized US-Iran deal has significantly eased geopolitical tensions in the Middle East, with the tail risk to energy supply receding. The pullback in crude oil has cooled global inflation expectations. If the reopening of the Strait of Hormuz eases the ex-China sulfur supply crisis, cost support for nickel prices will weaken. Meanwhile, nickel prices remain constrained by high inventories. In the near term, nickel prices are expected to trade in the range of 133,000-140,000 yuan/mt.