SMM Nickel, September 17:
Macro and market news:
(1) The US Fed resumed rate hikes after a three-year pause, unanimously approving a 25 bp increase to 3.75%-4.00%. The median dot plot shows the rate at around 4.10% by the end of 2026 (up from 3.75% in June), with 16 of 18 officials expecting at least one more hike this year (12 expect one more, 4 expect two more, and none expect a cut). Warsh struck a hawkish tone at the press conference: "Inflation is too high and has persisted for too long," "Summer data show no material improvement in the underlying trend," and "It is hard to say financial conditions are restrictive." The statement removed language attributing high inflation to energy supply shocks. Traders now price in over 53% odds of another hike in October, and Morgan Stanley expects another 25 bp in December.
(2) Markets repriced after the decision: the US dollar returned to 100 and US stocks tumbled. The US dollar index rose 0.68% to 100.31; US stocks fell across the board into the close, with the Dow down 1.21% to its lowest since mid-June, the S&P 500 down 0.45%, and the Nasdaq down 0.01%; spot gold briefly fell below $4,240/oz, and spot silver dropped over 2%.
(3) The decision itself was in line with expectations, but the hawkish wording was the key. Warsh framed the hike as "withdrawing some accommodation" rather than defending against recession, prioritizing anti-inflation credibility over political comfort—against White House pressure for rate cuts, the unanimous hike itself was a signal of independence. The Fed expects inflation to return to the 2% target only by 2029, one year later than previously estimated.
Spot market:
On September 17, SMM #1 refined nickel averaged 125,400 yuan/mt, up 2,200 yuan/mt from the previous trading day. In spot premiums, Jinchuan #1 refined nickel averaged 4,250 yuan/mt, up 400 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from 0 to 500 yuan/mt.
Futures market:
The most-traded SHFE nickel contract (2610) opened higher and rose in morning trading, closing the morning session at 123,540 yuan/mt, up 1.40%.
Short-term outlook:
With the rate hike landing as expected, SHFE nickel staged a technical rebound on "bad news exhausted," but the dot plot and Warsh's remarks were both hawkish, and odds of an October hike have surpassed 50%. Macro pressure has only been deferred, not removed. Combined with nickel's own high inventory and weak demand, the sustainability of the rebound is questionable. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 121,000-126,000 yuan/mt.
![[SMM Analysis] Nickel prices fell and procurement demand was weak, nickel salt prices declined this week](https://imgqn.smm.cn/usercenter/UruWE20251217171732.jpg)
