[SMM Nickel Midday Commentary] Nickel prices plunged intraday on August 14, and expectations for a US Fed interest rate hike in September cooled further.

SMM Nickel News, August 14:

Macro and Market News:

(1) The overall increase in the US Producer Price Index (PPI) for July remained mild, indicating that inflationary pressures eased further and that expectations for a US Fed rate hike in September cooled further.

(2) Today, the People's Bank of China will conduct outright reverse repo operations totaling 1,000 billion yuan via fixed-quantity, interest-rate tender, and multiple-price auction, with a term of 6 months (185 days), due on February 15, 2027 (postponed if it falls on a holiday).

Spot Market:

On August 14, SMM #1 refined nickel averaged 127,800 yuan/mt, down 950 yuan/mt from the previous trading day. In terms of spot premiums, Jinchuan #1 refined nickel averaged 1,400 yuan/mt, up 150 yuan/mt from the previous trading day, while domestic mainstream electrodeposited nickel brands ranged from -100 to 500 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2609 contract plunged sharply in early trading and was quoted at 127,300 yuan/mt as of the morning close, down 1.12%.

The Indonesia Nickel Miners Association (APNI) recommended keeping the 2026 nickel ore RKAB at 270 million wmt and setting an additional 30 million wmt of strategic buffer quota, meaning the potential total quota could reach 300 million wmt. With RKAB quota expectations loose, nickel prices may stay in the doldrums in the short term, and the most-traded SHFE nickel contract is expected to trade in a range of 125,000-130,000 yuan/mt.