[SMM Nickel Midday Review] On July 20, nickel prices edged down, and the US-Iran conflict intensified.

SMM Nickel July 20 News:

Macro and Market News:

(1) US media reported that the US-Iran conflict had intensified, and the Pentagon was stepping up the deployment of F-16 and F-35 fighter jets to the Middle East. An adviser to Iran's Supreme Leader said that if the US military continued its operations, Iran might shift to a full-scale offensive phase.

(2) The Ministry of Finance, the General Administration of Customs, and the State Taxation Administration issued an announcement clarifying that, starting from September 1, 2026, the consumption tax policy for some battery products would be adjusted step by step. It stated that sodium-ion batteries, solid-state batteries, fuel cells, and solar cells including perovskite cells, tandem cells, and gallium arsenide cells would be exempt from consumption tax.

Spot Market:

On July 20, SMM #1 refined nickel price rose 750 yuan/mt from the previous trading day. For spot premiums, the average for Jinchuan #1 refined nickel was 1,650 yuan/mt, down 100 yuan/mt from the previous trading day, while the range for mainstream domestic electrodeposited nickel brands was -300 to 500 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2609) rose in early trading before pulling back slightly, closing the morning session at 130,720 yuan/mt, down 0.13%.

As the conflict between the US and Iran escalated, shipping in the Strait of Hormuz was restricted, strengthening sulfur cost support. However, refined nickel inventories remained difficult to digest, with both domestic and international inventories still at high levels and destocking slow. In the short term, the price range of the most-traded SHFE nickel contract is expected to be 125,000-130,000 yuan/mt.