SMM nickel, September 30:
Macro and market news:
(1) Expectations for US Fed interest rate hikes have marginally cooled, but long-end yields hit multi-year highs again. Williams said there could be another rate hike later this year "but there is no need to rush into action," while Barr, Musalem, and several other officials reiterated their hawkish stance. Market pricing for an October hike pulled back from around 70% to about 50%. However, the 30-year Treasury yield briefly broke above 5.6%, the highest since 2002, while the 10-year held steady at 5.23%. The US dollar index rose 0.19% to 101.38, meaning pressure from rates has not been lifted.
(2) US-Iran talks made little progress, and oil prices closed lower. Neither side was willing to compromise. Overnight, WTI crude fell 3.95% to $88.94/bbl and Brent fell 2.17% to $95.71, with geopolitical premiums pulling back in phases. However, the Middle East conflict remains a tail risk for oil prices. The Reserve Bank of Australia raised rates by 25 bp to 4.35% as expected, with a hawkish tone in its post-meeting statement.
(3) US economic data weakened: August JOLTS job openings fell to 7.079 million (the lowest in five months and the third consecutive month of missing expectations), and September consumer confidence dropped to its lowest since 2014. The job market remains stuck in a "low hiring, low layoffs, low turnover" pattern. Overnight, US stocks closed slightly lower (Dow -0.26%), while A-share turnover hit a new year-to-date low of 1.41 trillion yuan.
Spot market:
On September 30, the average price of SMM #1 refined nickel was 123,600 yuan/mt, down 1,100 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 3,750 yuan/mt, up 50 yuan/mt from the previous trading day. The range for mainstream domestic electrodeposited nickel brands was -200-500 yuan/mt.
Futures market:
The most-traded SHFE nickel contract (2611) opened lower and moved lower in early trading, closing the morning session at 121,830 yuan/mt, down 1.00%.
Short-term outlook:
Although US-Iran talks have pulled oil prices back, inflation pressure has not eased. The rate pressure from 30-year Treasury yields above 5.6% and the US dollar above 101 remains in place. Combined with nickel's own high inventory and weak demand, the overall trend is under pressure. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 121,000-125,000 yuan/mt.
