[SMM Nickel Midday Review] On August 5, nickel prices plunged again, while Iran is still negotiating with Oman over the Strait of Hormuz.

SMM nickel August 4 news:

Macro and Market News:

(1) Today, the People's Bank of China conducted a 500 billion yuan outright reverse repo operation with a fixed quantity, rate tender, and multiple-price bidding method, for a term of 3 months (92 days), maturing on November 5, 2026 (postponed in case of holidays).

(2) Iranian Foreign Ministry spokesperson Baghaei said on the 4th that Iran is still in negotiations with Oman over the Strait of Hormuz, and the talks have made "positive progress" at both technical and political levels.

Spot Market:

On August 5, the average price of SMM #1 refined nickel was 130,650 yuan/mt, down 2,750 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 1,150 yuan/mt, unchanged from the previous trading day, while mainstream domestic brands of electrodeposited nickel ranged from -200 to 400 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2609 contract plunged in the night session and continued to decline in the morning session, closing the morning session at 130,810 yuan/mt, down 0.78%.

Expectations for a potential reopening of the Strait of Hormuz following progress in US-Iran negotiations have led to a pullback in sulfur forward prices, with signs of easing on the cost side. Additionally, there are expectations of further relaxation in Indonesia's RKAB supplementary quotas. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 128,000-135,000 yuan/mt.