Nickel Prices to Rangebound in the Near Term

SHANGHAI, May 6 (SMM) - The FOMC announced on the evening of May 3 that it would hike the target rate from 4.75%-5.0% to 5.0%-5.25%, which was in line with expectations. This meeting also suggested that the current inflation outlook does not support a Fed rate cut, but there may be a short-term pause in rate hikes. Under the long-term rate hike cycle, although inflation appeared to objectively reduce, the negative impact on the job market remained large, thus suppressing consumption and increasing the risk of economic recession, which has a depressing effect on the nonferrous metals sector. SHFE nickel surged in the early trading yesterday affected by the overseas nickel futures prices. The spot premiums trended lower, but the absolute prices still stood high. The spot transactions fell short of expectations. NPI traders were less willing to ship cargoes amid low market supply and high costs. On the demand side, the spot prices of stainless steel in the Wuxi and Foshan markets rose somewhat on Thursday. Stainless steel mills’ slower spot shipments to the market slightly pushed up the spot prices on Thursday, but the trades were average. In general, the low spot supply at home and abroad continues to beef up the nickel prices. SHFE nickel will move rangebound.