[SMM Nickel Midday Review] Nickel prices rebounded on reduced positions on October 13, as Hammack's hawkish remarks fueled bets on another rate hike by year-end

SMM nickel, October 13:

Macro and market news:

(1) Fed's Hammack strikes a hawkish tone, bets on another year-end rate hike heat up. Cleveland Fed President Hammack said rates need to go higher, current policy is not restrictive enough, and inflation is returning too slowly, favoring a "small, frequent" approach to rate hikes; the 10-year Treasury yield held above 5% (futures around 5.24%), the US dollar index rose 0.37% to 102.586, near its highest since April 2025, and market bets on one more rate hike before year-end intensified.

(2) Oil prices settle at two-week highs as Middle East conflict escalates on multiple fronts. Iran's Revolutionary Guard confirmed a supertanker was attacked in the Strait of Hormuz; Houthi forces struck Riyadh airport in Saudi Arabia with ballistic missiles; Yemeni government forces said about 950 Houthi fighters were killed within 24 hours. WTI rose 2.06% to $93.74/bbl, Brent rose 1.84% to $106.65, both settling at two-week highs.

(3) China: The Ministry of Finance will cut the VAT export rebate rate for NEVs from 13% to 9% (effective April 2027); September NEV retail sales reached 1.084 million units, down 16.7% YoY; He Lifeng met with Apple Executive Chairman Tim Cook; the 2026 Financial Street Forum Annual Conference opens on October 19.

Spot market:
On October 13, SMM #1 refined nickel averaged 120,450 yuan/mt, flat from the previous trading day. In terms of spot premiums, Jinchuan #1 refined nickel averaged 4,250 yuan/mt, up 100 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -100 to 600 yuan/mt.

Futures market:
The most-traded SHFE nickel contract (2611) opened higher and drifted higher in morning trading, closing the morning session at 118,640 yuan/mt, up 0.70%.

Short-term outlook:
Overnight oil prices settled at two-week highs, Hammack struck a hawkish tone, the dollar approached a phase high, and the 10-year Treasury yield held above 5%, leaving macro pressure intact. SHFE nickel rebounded in the morning on position reduction, while its own high inventory and weak demand pattern remained unchanged. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 118,000-121,000 yuan/mt.