[SMM Nickel Midday Review] On May 9, refined nickel prices dropped slightly, and the Bank of England cut interest rates

SMM Nickel News on May 9:

Macro News:

(1) On Thursday, Trump announced a "breakthrough" trade deal with the UK: maintaining a 10% benchmark tariff on the UK, expanding market access for both sides, eliminating tariffs on UK steel and aluminum, imposing a 0% tariff on US agricultural products, and implementing a tiered tariff on UK car imports. The US dollar index reached its highest reading since April 10, ultimately closing up 0.76% at 99.86. The benchmark 10-year US Treasury yield closed at 4.2740%, while the more monetary policy-sensitive 2-year US Treasury yield closed at 3.7870%.

(2) A day after the US Fed decided to keep interest rates unchanged, the Bank of England (BoE) cut rates, highlighting the growing divergence between the Fed and other global central banks in response to Trump's tariffs. The BoE's Monetary Policy Committee lowered interest rates from 4.5% to 4.25% on Thursday, marking the fourth rate cut in seven meetings. This move will bring its overall reduction in borrowing costs in line with that of the US. Although the BoE is easing policy more cautiously than other European central banks, it has cleared the way for more aggressive action if the tariffs hit economic growth harder than expected. In a statement, the BoE said, "The Committee will remain sensitive to the increased unpredictability of the economic environment."

Spot Market:

Today, the SMM 1# refined nickel price is 123,350-126,300 yuan/mt, with an average price of 124,820 yuan/mt, down 75 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan No.1 nickel is 2,200-2,400 yuan/mt, with an average premium of 2,300 yuan/mt, up 50 yuan/mt from the previous trading day. The premium and discount quotation range for Russian nickel is 0-300 yuan/mt, with an average premium of 150 yuan/mt, unchanged from the previous trading day.

Futures Market:

The most-traded SHFE nickel contract (NI2506) surged to a high of 124,000 yuan/mt in the morning session before weakening continuously. As of 11:30, the closing price was 123,420 yuan/mt, up approximately 0.2% from the settlement price of the previous trading day.

Currently, bullish and bearish factors are intertwined in the nickel market, with nickel prices fluctuating rangebound. The upside pressure comes from weak downstream demand, high inventory pressure, and macroeconomic uncertainties, while the downside support relies on the cost line. Meanwhile, refined nickel raw materials are in short supply, which will affect supply in the short term.