[SMM Nickel Midday Review] Nickel prices swung wildly and edged down on October 14, with the market in a tug-of-war ahead of the US CPI release tonight

SMM Nickel, October 14:

Macro and market news:

(1) Fed "third-in-command" Williams sent a dovish signal, raising expectations for an end to rate hikes. New York Fed President Williams (permanent voting member) said one more rate hike this year is appropriate but there is no need to hike in 2027, marking the Fed's first explicit signal that "only one final hike remains in 2026." After his remarks, the US dollar and Treasury yields pulled back, with the 10-year Treasury yield falling 1.6 bp to 5.221%, and the US dollar index retreating from an 18-month high, down 0.37% to 102.2. However, internal divisions remain (Goolsbee and Barkin lean hawkish). The US September CPI will be released at 20:30 tonight, the last inflation data before the October 27-28 FOMC meeting and a key deciding factor.

(2) Middle East conflict continues, keeping oil prices firm. Twenty-four ships were attacked in the Strait of Hormuz over the past two weeks; Saudi Aramco's headquarters office building in Dhahran was hit by Houthi fire and caught fire; Israeli media reported that Netanyahu discussed with Trump a large-scale joint strike on Iran before the election; US Central Command said the Strait of Hormuz is controlled by US forces and regional partners, and that over 19 million barrels of crude oil were shipped out with assistance the previous day. WTI rose 1.61% to $93.88/barrel, and Brent rose 0.44% to $104.77.

(3) China: September CPI, PPI, and trade data were released today; the central bank approved Visa to prepare for a bank card clearing institution.

Spot market:
On October 14, the average price of SMM #1 refined nickel was 120,550 yuan/mt, up 100 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 4,200 yuan/mt, down 50 yuan/mt from the previous trading day, and mainstream domestic brands of electrodeposited nickel ranged from -100 to 600 yuan/mt.

Futures market:
The most-traded SHFE nickel contract (2611) swung wildly during the daytime session, closing at 118,320 yuan/mt, down 0.14%.

Short-term outlook:
Williams' dovish signal pulled back the US dollar and Treasury yields and raised expectations for an end to rate hikes, but market sentiment is cautious ahead of tonight's US September CPI release, with weak position-building momentum. Nickel's own pattern of high inventory and weak demand remains unchanged. If tonight's CPI is mild, dovish expectations will be realized, supporting a rebound; if it exceeds expectations, prices will come under pressure again. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 118,000-121,000 yuan/mt.