SMM nickel, September 14:
Macro and market news:
(1) US August CPI landed, with the probability of a September rate hike surging to around 90%. August CPI rose 3.4% YoY, in line with expectations, while the 0.4% MoM gain marked the highest since June. Core CPI rose 0.3% MoM, beating the 0.2% expected. After the data release, traders priced in a roughly 90% chance of a hike at the September 15-16 meeting and fully priced in two more hikes by year-end. "New Fed wire" Timiraos said investors have largely concluded that the Fed will deliver its first rate hike in three years next week. The 10-year Treasury yield hit 4.986% intraday, approaching the 5% mark, the highest since October 2023.
(2) Middle East situation remained volatile, with oil prices falling first and then rising. Last Friday, on expectations of a Red Sea ceasefire and Iran-Gulf state talks, WTI settled down 3.95% at $96.62/bbl and Brent fell 4.3% to $101.73. But over the weekend, Saudi Arabia's precautionary shutdown of the East-West pipeline, which could threaten 4% of global supply, an attack on an Iranian cargo vessel near Hormuz that killed one and injured four, and the postponement of today's Oman regional meeting sent oil prices up more than 2%-3% in early Asian trading Monday.
(3) US stocks snapped a four-day losing streak last Friday, but futures pulled back this morning. The S&P 500 rose 0.86%, the Dow gained 0.98%, and the Nasdaq added 0.96%, with AI server names strengthening, Dell up 12% to a record high. But in early Asian trading Monday, Nasdaq 100 futures fell 1%, and the three AI giants' joint call to slow model development sparked heated debate. The University of Michigan's September consumer sentiment index plunged to 47.8, while one-year inflation expectations jumped to 4.6%.
Spot market:
On September 14, SMM #1 refined nickel averaged 126,100 yuan/mt, down 1,500 yuan/mt from the previous trading day. In terms of spot premiums, Jinchuan #1 refined nickel averaged 2,800 yuan/mt, up 400 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -100 to 500 yuan/mt.
Futures market:
The most-traded SHFE nickel 2610 contract opened lower and stayed weak in early trading, closing the morning session at 125,210 yuan/mt, down 0.93%.
Short-term outlook:
August core CPI beat expectations, sending the market-implied probability of a September rate hike sharply higher, while the 10-year Treasury yield approached the 5% mark. Macro pressure continued to build, and bears are expected to dominate until the Fed's rate decision on Thursday. SHFE nickel hit an intraday low of 124,300 yuan, with its own high inventory and weak demand picture unchanged. However, downside room on the cost side is also relatively limited. In the short term, the most-traded SHFE nickel contract is expected to trade in a range of 125,000-129,000 yuan/mt.
