[SMM Nickel Midday Review] On July 31, Nickel Prices Edged Up, and Japan Conducted an Exchange Rate Intervention by Buying Yen and Selling Dollars

SMM Nickel, July 31:

Macro and Market News:

(1) The Japanese government and the Bank of Japan conducted a currency intervention involving buying yen and selling US dollars, while the US monetary authorities also conducted “exchange rate checks” as a preliminary step to intervention.

(2) Data released by the US Department of Commerce on Thursday showed that the Personal Consumption Expenditures (PCE) price index fell 0.1% MoM last month, dragged down by lower energy prices. The PCE inflation rate YoY fell to 3.7%, down from 4.1% in May, after hitting a three-year high.

Spot Market:

On July 31, the SMM #1 refined nickel average price was 132,600 yuan/mt, up 600 yuan/mt from the previous trading day. Regarding spot premiums, Jinchuan #1 refined nickel averaged 1,200 yuan/mt, flat from the previous trading day, while domestic mainstream brand electrodeposited nickel ranged from -300 to 500 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2609 contract shot up in early trading then pulled back slightly, closing the morning session at 131,900 yuan/mt, up 0.49%.

The July FOMC meeting kept interest rates unchanged, and a weaker US dollar pushed most nonferrous metals higher; expectations of tighter quotas in Indonesia and sulfur cost support are solidifying the bottom for nickel prices. The most-traded SHFE nickel contract is expected to trade in the range of 128,000-135,000 yuan/mt.